More Estate Cases Reviewed: Simpson Wigle Law LLP v. Lawyers’ Professional Indemnity Company, 2014,  Dhillon v. Jaffer, 2014, & Peet v. The Law Society of Saskatchewan, 2014

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2014: Simpson Wigle Law LLP v. Lawyers’ Professional Indemnity Company

This case examines the insurance coverage lawyers have in place for negligence claims through the Lawyers’ Professional Indemnity Company (LawPro).^[1]

The defendant law firm in this negligence claim was insured under a policy that had a limit of liability of $1 million per claim, with an aggregate limit of $2 million. The suit was brought by former clients who were brothers who jointly owned and operated a number of agricultural businesses and properties.

The lawyers argued that the statement of claim gave rise to at least two separate claims: one claim arising from the allegedly improper appointment of the lawyer and CIBC as committees of the brother’s person and estate when there was an attorney under a POA (the “POA allegation”), and a second claim arising from the allegedly negligent administration of the one brother’s estate (the “Real Property Claim”). The application judge found that the two claims were ‘related’ within the meaning of the insurance policy: the losses where the same, the fiduciary duty was the same, and therefore constituted only one claim.

The Court of Appeal looked to the specific wording of the policy and case law that considered whether two claims in a statement of claim were “related” for the purposes of the policy, and concluded that “the Statement of Claim fundamentally advances two claims” and that “the two claims in the Statement of Claim arise from errors, omissions or negligent acts that are sufficiently different in nature and kind that they are not related within the meaning of the Policy.”^[2] The allegations underlying the two claims were different in nature and kind: one dealt with the improper appointment of the lawyer and CIBC as committees of the brother’s person and estate because the lawyer failed to disclose the appropriate information to the Court. The second claim arose from allegedly improvident or unnecessary sales of six parcels of land and failing to take the opportunity to increase the value of two of those properties through inclusion in a designated Waterdown urban expansion area.  The real property claim was based on allegations of active mismanagement instead of an error or omission or negligence. There was an insufficient association or connection between the two negligence claims from a legal perspective.^[3] The Court issued an order declaring that the Statement of Claim contained more than one claim within the meaning of the policy. This case will provide guidance for future solicitor’s negligence claims and assist in determining the scope of the insurance coverage for solicitors.

2014: Peet v. The Law Society of Saskatchewan

While this case is a professional misconduct case before the Saskatchewan Law Society Hearing and Discipline Committee,^[4] and not a negligence claim, it provides some guidance on the proper standard of care of an estates lawyer.

The case involved two complaints. Within the first complaint, a client hired the lawyer to assist with a filing for probate, the selling of the client’s father’s house and distributing her father’s estate to herself and a brother who lived in Ontario. At the beginning all went well and virtually all of the assets in the estate had been liquidated and letters probate were issued. The lawyer wrote to the client and recommended steps to wind up the estate and asked for a complete list of expenses the client had paid from the estate funds. The client complied with the request but then did not hear from the lawyer for almost a year. After repeated follow-up calls, long response times, or no responses, and various correspondence and mistakes with the accounting, the client completed the estate work herself and them complained to the law society.

The second complaint involved a holograph will. The clients (adult children of the deceased) asked the lawyer to determine if the document was a valid will and to proceed to probate it as soon as possible if it was. The lawyer said this would be done within a couple of months.^[5] One of the adult children was elderly and lived outside of the province. She called the lawyer multiple times in the months and year following the meeting. She concluded that the lawyer had not actually done any work on their file. When her sister called a year after the meeting the lawyer did not return any of her calls but  the lawyer eventually left a message saying that her matter had fallen “through the cracks”. When she finally spoke with the lawyer he said he thought the family was supposed to be looking for another will, despite the instructions provided to the lawyer to try and probate the holograph will. Eventually more than a year after the initial meeting the lawyer attempted to probate the holograph will but was unsuccessful as a Court held that it was not a valid testamentary instrument and could not be probated. The clients filed a complaint with the Law Society in 2008.

The Hearing Committee found with respect to the first estate:

In summary, though [the lawyer] appeared to be quite diligent with respect to the O.N. estate at the outset, there was an unexplained period over one year whereby there was poor, if any, communication with the client and no appreciable work advanced on finalizing the estate. Again with the lack of any explanation from [the lawyer] at the hearing on this failure to communicate and the delay.  . . . the Committee comes to the conclusion that [the lawyer] is guilty of conduct unbecoming. . .^[6]

With respect to the second estate:

The failure to return phone calls, the failure to complete the application for probate and failure to complete the additional documents in a timely manner are indicators of service that is below that required for competent lawyers in this situation. . .^[7]

The lawyer’s licence was suspended for a period of 30 days and he was ordered to pay costs of the proceedings. He appealed, arguing among other things, that he had performed all the services required of him and that any delays on his part were the result of not having received information from the client. The Court of Appeal was not persuaded by this argument. There “was a delay of over 13 months” during which the client “left about ten telephone message for [the lawyer] which were not returned.”^[8] The Committee had concluded that the service was below that which was required and expected for competent lawyers in this situation. The Court of Appeal concluded that this was an entirely reasonable conclusion for the Committee to reach.

The lawyer also argued that the Committee should have head from an expert lawyer with deep experience in estate work before it made its decision. The Court of Appeal dismissed this argument as well:

I see no reason why, on the facts of this complaint, the evidence of an expert was necessary. The root reality is that effectively nothing was done to advance the file concerning E.B.’s estate from July of 2007 (the initial meeting with M.B. and her siblings) to July of 2008 (when the will was sent for probate). During this time, Mr. Peet left many calls unreturned and acknowledged in a message for M.B. that things had fallen “through the cracks”. No expert was required to allow the Hearing Committee to determine that all of this amounted to a failure to provide legal services to M.B. and the Estate of E.B. in a conscientious, diligent and efficient manner.^[9] [emphasis added]

His appeal was dismissed, although he was allowed to have the Registrar assess the award with respect to costs that was made against him.^[10]

2014: Dhillon v. Jaffer

This was an appeal from an assessment of damages in a solicitor’s negligence case.^[11] The question of liability of the solicitor was decided by the British Columbia Court of Appeal in 2012.^[12] The Court found that his conduct in releasing to his client, Mrs. Dhillon, the entire net proceeds of sale of her and her husband’s former matrimonial home, pursuant to a forged “Special Power of Attorney” had fallen “well below” the standard of care expected of a reasonably competent lawyer.^[13] The home had been registered in the name of Mr. Dhillon alone and he was living in India at the time of the sale. The Court of Appeal held that even though Mr. Dhillon had not been the solicitor’s client, the lawyer should have been “mindful” of his interests in dealing with the proceeds he had received in trust. As Donald J.A. observed in the 2012 solicitor’s negligence Court of Appeal decision:

It would be difficult to find a case with a closer proximity than this. While the respondent’s mandate for Mrs. Dhillon was to undo the deal to sell the house, when he failed in that endeavour, he was left with the responsibility of handling the appellant’s property. The sale proceeds came into his hands. They derived from the exercise of a Special Power of Attorney which he believed to be genuine. The sale was effected by Mrs. Dhillon on the appellant’s behalf as sole registered owner. As far as the respondent knew, the appellant wanted all the proceeds for himself and was not prepared to share them with Mrs. Dhillon; after all, that was her principal motive in trying to collapse the sale. The respondent had to know that paying the proceeds to Mrs. Dhillon was contrary to the appellant’s wishes.^[14]

The assessment of damages against the lawyer was remitted to the British Columbia Supreme Court. Melnick J. made his analysis of damages on the basis of negligence, and not breach of fiduciary duty on the part of the lawyer.^[15] The onus of proof rested on the plaintiff to demonstrate that but for the negligence of the solicitor, he would not have suffered any given loss for which he claims.^[16] Melnick J. concluded that the plaintiff was entitled to judgment for the entire (net) proceeds of sale of the house of $187,201.18. Melnick J. also awarded $40,000.00 in general damages, concluding that as long as the injury was reasonably foreseeable, the claim for general damages was a proper one.^[17] Menick J also ordered damages for loss of opportunity in the amount of $5,000.00. The lawyer appealed.

The Court of Appeal allowed the appeal and set aside the award of all damages made against the lawyer, with the exception of the $5,000 award for loss of opportunity which was not the subject of appeal.^[18] Fundamental rules of tort law dictate that the plaintiff cannot recover more than was caused by the defendant’s wrong and a tortfeasor is  responsible only for losses occasioned by foreseeable harm. In this case the plaintiff had already been awarded title to the house into which $101,000.00 of the sale money had been traced. To allow the plaintiff to then recover the full $187,000.00 from the defendant solicitor would have violated the rule against double recovery. Also, at the time of the sale of the house the spouse was presumptively entitled to 50% of the matrimonial home, so the foreseeable losses at the time of the tort were only $93,500.00. The plaintiff therefore had his losses fully satisfied. The Court also held that damages for mental distress were not available in this case.^[19] Leave to appeal to the Supreme Court of Canada was denied.^[20]

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[1] Simpson Wigle Law LLP v Lawyers’ Professional Indemnity Company, 2014 ONCA 492 [Simpson Wigle].

[2] Simpson Wigle, supra note 90 at para 76.

[3] Ibid at para 80.

[4] Peet v. The Law Society of Saskatchewan, 2014 SKCA 109 [Peet].

[5] Ibid at para 19.

[6] Peet, supra note 93 at para 30.

[7] Ibid at para 31.

[8] Ibid at para 65.

[9] Peet, supra 93 at para 69.

[10] Ibid at para. 95

[11] Dhillon v Jaffer, 2014 BCCA 215, leave to appeal to SCC denied, 2015 CanLII 1302 (SCC) [Dhillon].

[12] Dhillon v Jaffer, 2012 BCCA 156.

[13] Dhillon v Jaffer, 2012 BCCA 156 at para 48.

[14] Dhillon v Jaffer, 2012 BCCA 156 at para 34.

[15] Dhillon, supra note 103 at para. 15.

[16] Ibid at para 15 citing trial decision 2013 BCSC 1595 at para 32.

[17] Dhillon, supra note 103 at para 21.

[18] Ibid at para 60.

[19] Ibid at para 58.

[20] 2015 CanLII 1302 (SCC).

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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.