Independent Legal Advice – 7 Factors to Look For

Independent Legal Advice

I am typically attempting to set aside a transaction or a will and I often look to see if there was independent legal advice (ILA) given and if so, was it truly independent.

For example on a recent file a daughter took her mother to a lawyer and instructed the lawyer to transfer the mother’s property into joint tenancy with her mother’s  grandson, the son of the instructing daughter.

The owner/grandmother then died and the grandson purported to be the owner of the property.

When we obtained and reviewed the lawyers file, he not only took instructions to prepare the transfer from the mother of the recipient grandson of the interest in joint tenancy,  but the bill was also rendered to the daughter , while meanwhile the lawyer  takes the position that he acted for the donor grandmother.

If so, where was her independent legal advice?

Factors to Look For in Independent Legal Advice

1. The person taking advantage of the wealth transfer is present at the time the advice is given or the time the documents are signed.

2. Some or all of the instructions have come from the person taking advantage from the transaction.

3. The lawyer does not have a full understanding of the client’s overall asset picture, and is unable to assess or to discuss the extent to which it will impoverish them.

4. The lawyer has any prior professional relationship with the person taking advantage.

5. The lawyer has a past or current personal relationship with the person taking advantage (e.g., childhood friend, best friend of lawyer’s wife).

6. The lawyer is upon close scrutiny really acting for someone other than the client, or is acting in a joint retainer with the person taking advantage.

7. Any part of the fees are being paid by the person taking advantage under the rela­tionship rather than by the client himself or herself.

Drafting Lawyer Has Heavy Duty to Investigate Testamentary Capacity

Drafting Lawyer Has Heavy Duty to Investigate Testamentary Capacity

Friesen v Friesen Estate (1985) 24 ETR 191 sets out inter alia the heavy duty upon a lawyer taking instructions for a will to investigate and satisfy him or herself that the testator has testamentary capacity.

77      The law reports of England and Canada are replete with lengthy decisions setting forth the principles to be applied when testamentary capacity has been challenged, and describing the standards expected of a solicitor who has drafted a challenged will. Banks v. Goodfellow (1870), L.R. 5 Q.B. 549; Tyrrell v. Painton, [1894] P. 151 (C.A.); Menzies v. White (1892), 9 Gr. 574; Murphy v. Lamphier (1914), 31 O.L.R. 287 (affirmed 32 O.L.R. 19); Leger v. Poirier, [1944] S.C.R. 152, [1944] 3 D.L.R. 1 (S.C.C.), and Slater v. Chitrenky, [1981] 4 W.W.R. 421, 10 E.T.R. 191, (sub nom. Re Campbell; Slater v. Chitrenky) 28 A.R. 54 (Alta. Surr. Ct.) [affirmed [1982] 3 W.W.R. 575, 11 E.T.R. 171 (C.A.)], are only a few. Rather than review or quote extensively from those cases, I will enumerate what I regard to be the basic rules to be garnered therefrom, as they apply to this case.

1. Proving testamentary capacity rests upon he who propounds the will or seeks to take advantage therefrom.

2. For a testator to be of a sound and disposing mind, he must understand the extent of the property of which he is disposing; he must be able to comprehend and appreciate the nature of the claims of others who might be expected to participate in his bounty.

3. Whenever a will is prepared and executed in circumstances which arouse the suspicion of the Court, it will not be admitted to probate unless the person propounding it produces evidence which is sufficient to remove the suspicion and to satisfy the Court that the testator both knew and approved the contents of the will.

4. The weight of the onus will be proportionate to the gravity of the suspicion raised in any particular case.

5. Neither the superficial appearance of lucidity nor the ability to answer simple questions in an apparently rational way are sufficient evidence of capacity.

6. The duty upon a solicitor taking instructions for a will is always a heavy one. When the client is weak and ill, and particularly when the solicitor knows that he is revoking an existing will, the responsibility will be particularly onerous.

7. A solicitor cannot discharge his duty by asking perfunctory questions, getting apparently rational answers, and then simply recording in legal form the words expressed by the client. He must first satisfy himself by a personal inquiry that true testamentary capacity exists, that the instructions are freely given, and that the effect of the will is understood.

The Duty of Care Owed By a Will Drafter

The Duty of Care Owed By a Will Drafter

In Korpiel v Sanguinetti (1999) B.C.J. 1048 the court concluded that a will drafter, usually a solicitor or notary, owes no duty of care to beneficiaries beyond the competent and timely fulfillment of the testator’s testamentary instructions.

In the Sanguinetti case, the court considered whether a will drafter owed a duty to beneficiaries who had been named in a client’s former will.  The plaintiffs were relatives of an elderly testator who had instructed his lawyer to prepare a will bequeathing his home to the plaintiffs.  Some years later, the testator changed his mind and instructed the lawyer to draft a new will, leaving the plaintiffs only a small bequest.

The plaintiffs challenged the later will and brought a court action against the lawyer who drafted it for a breach of fiduciary duty owed to them.  Their claim was dismissed.

The court held that if a will drafter were to conduct him- or herself as proposed by the plaintiffs—that is, to refuse to follow the client’s instructions in preference to the interests the potential beneficiaries—it would be impossible for the will drafter to avoid a conflict of duty and interest.  If the will drafter were to be held to advocate for inclusion of persons or terms of disposition that were contrary to the specific instructions of the client, it would clearly result in a conflict with the will drafter’s primary duty to his or her client.  The court found such a situation would be untenable.

Thus a will drafter cannot owe an independent fiduciary duty to the beneficiary of a will, for if the testator’s instructions were to conflict with the beneficiaries’ interests, the will drafter would be unable to avoid conflicting duties to both parties.

In Smolinski v. Mitchell [1995] 10 W.W.R. 68 (BCSC), Sigurdson J. considered the question of the duty of a solicitor to his client, in contrast to the duty to others who may be deprived of an inheritance by reason of a solicitor’s failure to properly carry out his client’s instructions.  His Lordship quoted from the English decision of Ross v. Caunters [1979] 3 All E.R. 580, [1980] Ch. D. 297 at 322:

“The argument seems to me to confuse duties which differ in their nature. In broad terms, a solicitor’s duty to his client is to do for him all that he properly can, with, of course, proper care and attention.  Subject to giving due weight to the adverb “properly,” that duty is a paramount duty.  The solicitor owes no such duty to those who are not his clients.  He is no guardian of their interests.  What he does for his client may be hostile and injurious to their interests; and sometimes the greater the injuries the better he will have served his client.  The duty owed by a solicitor to a third party is entirely different.  There is no trace of a wide and general duty to do all that properly can be done for him.  Instead, in a case such as the present, there is merely a duty, owed to him as well as the client, to use proper care in carrying out the client’s instructions for conferring the benefit on the third party.”

The Alberta Court of Appeal in Graham v. Bonnycastle, 2004 ABCA 270 (leave to appeal to the S.C.C. refused, [2004] S.C.C.A. No. 489) came to a similar conclusion after an extensive review of the law.

In the Graham case the children of the testator had been equal beneficiaries under a 1984 will.  In 1994, after having been diagnosed with Alzheimer’s disease, the testator executed a new will, leaving a small bequest to each of his children and grandchildren and the residue to his new wife.  After the testator’s death the children commenced litigation challenging both the validity of the marriage and the 1994 will on the basis of lack of mental capacity, which any beneficiary is entitled to do.

Both of those actions were discontinued and a settlement agreement was entered into by the parties.  The children subsequently commenced an action against the solicitor who prepared the 1994 will claiming damages for the difference between the bequest they would have received under the original will and the benefits they received pursuant to the settlement agreement.

The Court of Appeal upheld the decision of the trial judge and dismissed the children’s claims on the grounds that the solicitor owed no duty of care to the children who claimed as beneficiaries under the original will, and that the original will had been revoked by both the subsequent will and the subsequent marriage of the testator.  (Note:  In British Columbia, prior to the enactment of the Wills, Estates and Succession Act on March 31, 2014, a subsequent marriage revoked an existing will but that is no longer the case.)

The court made it clear, however, that by extension of the principles set out in Hedley Byrne & Co. Ltd. v. Heller & Partners Ltd. [1963] 2 All E.R. 575, a leading House of Lords decision, a will drafter may be liable to an intended beneficiary who, as a result of the will drafter’s negligence, does not receive a benefit which the testator intended to grant.

Thus the general rule that a will drafter owes a duty of care only to his or her client and not to any third party, has been modified to include a duty to an intended beneficiary under a will who does not, as result of the will drafter’s negligence, receive a benefit which the testator intended to grant.  This has been labelled the “third-party beneficiary rule”.

The leading case is the House of Lords decision in White v. Jones [1995] 1 All E.R. 691 at 698-99 in which the court found a testator’s solicitor liable to an intended beneficiary for negligently failing to have the testator’s new will prepared and executed before the testator died.

Thus the only duty of care owed to an identified third-party beneficiary is where the will drafter owes a duty to the third-party beneficiary as well as the client, to use proper care and diligence in carrying out the client’s instructions for conferring the benefit on the third party.

In the Graham case the Alberta Court of Appeal held that the will drafter’s primary duty was to carry out the intentions of the testator, after being satisfied that the testator had testamentary capacity and recording his or her observations in that regard, so that the testator’s will would subsequently be admitted to probate.

The will drafter’s duty to ensure testamentary capacity coincides with the duty to ensure that the will accurately reflects the testator’s wishes.  A will drafter could never owe an intended beneficiary a duty of care that is inconsistent with his or her duty to the client. (Hall v. Bennett Estate (2003), 227 D.L.R. (4th) 263 (ONCA).

The imposition of a duty to beneficiaries under a previous will would create inevitable conflicts of interest for a will drafter that would be contrary to public policy.  A will-drafting solicitor or notary cannot have a duty to follow the instructions of his or her client to prepare a new will and, at the same time, have a duty to beneficiaries under previous wills whose interests are likely to be affected by the new will.

The BC Court of Appeal decision of Johnston v. Johnston Estate 2017 BCCA 59 followed the reasoning of both the Graham and Sanguinetti decisions in disallowing the claims of children who inherited under their father’s 2007 will that was modified against their interests by a 2012 will and a codicil thereto.

The testator’s children had been heirs under the 2007 will but were disinherited under the subsequent will, in which the testator left his entire estate to his new wife.

At trial the court struck out that portion of the plaintiff’s claim that alleged that the drafting lawyer owed the children a duty of care as beneficiaries under the 2007 will to, in effect, not carry out their father’s instructions to prepare a new will in terms inconsistent with the provisions of the 2007 will, finding that such claim was doomed to fail.  The Court of Appeal upheld that decision.

Therefore, the only duty a will drafter has to beneficiaries is to carry out the instructions of the will maker in a competent and timely manner.

Court Costs Awarded Against Lawyer Personally

Court Costs Awarded Against Lawyer Personally

The Supreme Court of Canada dismissed an appeal of the Ontario Court of Appeal upholding a a substantial award of court costs against a  lawyer personally for his handling of a case found to be vexatious and an abuse of process.  The client was also jointly liable for the costs award (see Paul Slansky v Kingsland Estates Ltd et al February 2,2017 case # 37175).

The amount was assessed at $160,000 at the Superior Court level by Justice Healey  2015 ONSC 6269.

Mr. Slansky was further ordered to pay an additional $30,000 for costs of the appeal.

Justice Healey applied Ontario Rule 57.07 of the Rules of Court that allows the Court to order lawyers to pay costs personally when they ” cause costs to be incurred without reasonable cause or to wasted by undue delay, negligence or other default.”

The trial justice stated that ” Mr. Slansky counselled the plaintiff or otherwise allowed his client to proceed with a series of unmeritorious steps and to take unreasonable positions to achieve goals in this action.”

The Justice stated that the second action did not have a ” scintilla of merit” and that it was the most ” vexatious and abusive” claim she had ever ruled upon.

In 2007 the client Donald Best , before he was represented by Mr. Slansky sued 62 defendants for negligence and economic loss.

In the course of the proceedings Mr. Best was found to be in contempt of court and served 60 days in prison.

Mr. Best continued to assert allegations that were found to be baseless and vexatious and an award of full indemnity for costs was ordered against him (2013 ONCA 695).

Mr. Best then commenced a second action against 39 defendants where he was represented by Mr.  Slansky, who alleged misconduct on the part of the opposing lawyers, police and private investigators.

Many of the allegations in the second law suit were similar or identical to the first court action that was found to be baseless, vexatious and an abuse of process.

Many in the legal profession are concerned about the reasoning of the court as it may act to deter and punish  lawyers who take on “difficult cases”.

The decision has pointed out the fine line between lawyers taking on unpopular or difficult cases that might require the lawyer to adopt aggressive tactics, so that lawyers will therefor have to constantly evaluate whether their actions are consistent with their ethical obligations.

Independent Legal Advice and Undue Influence

Independent Legal Advice and Undue Influence

Under normal circumstances independent legal advice, if properly given should be sufficient to rebut any presumption of undue influence, but that was not the case in Cowper-Smith v Morgan 2016 BCCA 200 where the Court of Appeal upheld the trial judge in finding inter alia , that the independent legal advice provided was inadequate to rebut the presumption of undue influence.

The case should stand as a wake-up call to any practitioners dispensing independent legal advice that it must be thorough and relevant to the assessment of the question or issue before them, and to take the time and charge accordingly.

Failing to do so may expose professional liability by disappointed beneficiaries.

The Appeal Court stated as follows re the law of Independent Legal Advice:

51      The following considerations have also been identified as relevant to the assessment of the legal advice provided to the donor (Fowler Estate v. Barnes (1996), 142 Nfld. & P.E.I.R. 223 (Nfld. T.D.), Green J., adopted in Coish v. Walsh, 2001 NFCA 41 (Nfld. C.A.) at para. 23):

  1. Whether the party benefiting from the transaction is also present at the time the advice is given and/or at the time the documents are executed;
  2. Whether, though technically acting for the grantor, the lawyer was engaged by and took instructions from the person alleged to be exercising the influence;
  3. In a situation where the proposed transaction involves the transfer of all or substantially all of a person’s assets, whether the lawyer was aware of that fact and discussed the financial implications with the grantor;
  4. Whether the lawyer enquired as to whether the donor discussed the proposed transaction with other family members who might otherwise have benefited if the transaction did not take place; and
  5. Whether the solicitor discussed other options whereby she could achieve her objective with less risk to her.

[The “Coish” factors; citations omitted.]

52      The respondents also rely on jurisprudence that identifies two branches for assessing the adequacy of the independent legal advice given where an allegation of undue influence is raised: (i) advice as to understanding and voluntariness (attendance on execution); and (ii) advice as to the merits of a transaction (the wisdom of entering into the transaction). The first branch of the test requires that the independent advisor is satisfied the donor understands the transaction and enters into it freely and voluntarily. The second branch of the test requires something more than the independent advisor being satisfied that the donor understands the effect of the transaction and wishes to make the gift; it also requires that the independent advisor is satisfied that “the gift is one that is right and proper in all the circumstances of the case, and if he cannot so satisfy himself he should advise his client not to proceed.” See Cope v. Hill, 2005 ABQB 625 (Alta. Q.B.), aff’d 2007 ABCA 32 (Alta. C.A.) at paras. 210-212, citing Gold v. Rosenberg, [1997] 3 S.C.R. 767 (S.C.C.), Corbeil v. Bebris (1993), 141 A.R. 215 (Alta. C.A.), and Halsbury’s Laws of England, vol 18, 4th ed. at 157, para. 343.

53      Assessing the adequacy of the legal advice given is a fact-specific inquiry. It does not reduce to any precise test. In some circumstances, it may require advice on only the nature and consequences of the transaction. However, where concerns or allegations of undue influence arise, generally there will be a need to give “informed advice” on the merits of the transaction. See Cope at paras. 213-215, citing Brosseau v. Brosseau, 1989 ABCA 241 (Alta. C.A.) at paras. 22-23, Coomber v. Coomber, [1911] 1 Ch. [723] and Wright v. Carter, [1903] 1 Ch. 27 (Eng. C.A.) at 57-58.

Did the judge err in finding the presumption of undue influence and the presumption of resulting trust had not been rebutted?

54      It is common ground that findings with respect to undue influence and the intention of a party to gratuitously transfer property to another are subject to a deferential standard of review. See Boda Estate v. Boda, 2014 BCCA 354 (B.C. C.A.) at para. 72. An appellate court may not interfere with the findings and inferences of fact by a trial judge absent palpable and overriding error (see Housen v. Nikolaisen, 2002 SCC 33 (S.C.C.) at para. 10). Palpable error is one that is readily or plainly seen (Housen at para. 5); overriding error is one that must have or may have altered the result (see Van Mol (Guardian ad litem of) v. Ashmore, 1999 BCCA 6 (B.C. C.A.) at paras. 11-12).

55      The application of a legal standard to findings or inferences of fact raises a question of mixed fact and law. Where an alleged error of mixed fact and law can be attributed to the application of the wrong legal standard, element of the legal test, or error in principle, the error may be characterized as an error of law and is subject to the standard of correctness. However, if the legal principle is not readily extricable from the findings or inferences of fact, then the judge’s conclusions should not be overturned absent palpable and overriding error (Housen at paras. 26-36).

56      All three standards of review are engaged in this appeal. The appellant contends the judge erred in law by adopting a flawed approach in her assessment of the evidence of Ms. Iverson and Mr. Easdon, in order to determine whether the presumption of undue influence was rebutted. The appellant further alleges that in applying the legal test for rebutting the presumption of undue influence, the judge made a palpable and overriding factual error based on an erroneous inference that Elizabeth did not intend to execute the June 22, 2001 documents because she did not understand the nature and consequences of those documents. This error, the appellant submits, was material to her conclusion that the presumption of undue influence was not rebutted.

Negligence Standard Same For Lawyers and Notaries

Negligence Standard Same For Lawyers and Notaries

I recently advised an inquiry that the negligence standard for a lawyer/solicitor is the same as that for a notary public.

The authority for that proposition was initially pronounced in British Columbia in the decision Flandro v Mitha (1992) 93 DLR (4th) 222 at paragraph 232.

The Flandro case was followed and unreported decision from new Westminster registry 19980325

SO 847, Crowe and Killeen v Bollong of Mr. Justice Boyle who after a brief review of the standard of care, determined that the standard of care towards the client is the same for lawyers as it is for Notary Publics.

The test he or she must meet is that set out in Tracy and Morin v. Atkins (1980) 16 B.C.L.R. 223 at 227 (B.C.C.A.):

… one has to ask whether, as between the alleged wrongdoer and the person who has suffered damage there is a sufficient relationship of proximity or neighbourhood such that, in the reasonable contemplation of the former, carelessness on his (her) part may be likely to cause damage to the latter – in which case a prima facie duty of care arises.

The notary had failed to advise the clients to have a discretionary trust included in their will so that their disabled child would not lose state medical benefits after their passing. In passing the judge also noted that notaries are not allowed to prepare such discretionary trusts and that the notary should have referred the matter to a solicitor.

“I did not conclude it was necessary that the precise consequences of ineligibility for G.A.I.N. need have been foreseeable in order to bring home to the Defendant in negligence the injury and damage suffered by Sherry Ann.  It is enough that it was foreseeable – as I find it was – that a failure to create a discretionary trust would not preserve the body, management and distribution of the funds and would put the wellbeing of Sherry Ann at risk of harm.

[34] The Defendant is to be judged as a reasonably competent notary. He owed the same duty as a solicitor.  (Flandro v. Mitha (1992) 93 D.L.R. (4th) 222 at 232).

[35] It is not in itself fatal but the Defendant had no authority under the Notaries Act to draw a Will which included trust provisions (see s. 15). The weight of that exception as it applies in this case is that the testator’s instructions should have triggered the duty to refer her to a solicitor coupetent to draft a Will including the provision she sought which was to establish a discretionary trust. She probably would not have known the phrase “discretionary trust” but she knew what she wanted.

Disappointed Beneficiary? Sue the Lawyer

Sue the lawyer

Recent statistics issued by the Law Society indicate that approximately 4 – 6% of their claims both in number and in dollars, arise out of solicitor’s negligence relating to wills and estates. Apparently, over 40% of all claims result from either insufficient preparation or insufficient review for the task at hand. Continue reading

The Disappointed Beneficiary vs the Negligent Lawyer

A disappointed beneficiary is one who fully expected to inherit, should have inherited, but due to the lawyer’s negligence in failing to prepare and have the will executed by the testator in a “ timely manner”, the testator in the interim dies without having ever signed the will.

The intended beneficiary is VERY “ disappointed” and on occasion comes to see me.

The lawyer clearly does owe a duty of care to the beneficiary under our law, and if the lawyer was negligent in having the will prepared and signed in a “ timely manner”, the lawyer can be held liable to the third party intended beneficiary.

The following quote of law summarizes this interesting area:

Wilhelm v. Hickson [2000] S.J. No. 45

23 As observed by Lord Goff in White v. Jones, the liability of a lawyer to a disappointed beneficiary in respect of a will which has failed to carry out the testator’s intention because of the lawyer’s negligence has been much discussed. Notwithstanding the formidable difficulties in finding liability within the principles which had applied for at least a century to the legal relationship between lawyer and client, the overwhelming weight of authority in common law jurisdictions over the past 20 years or so has been in favour of finding liability one way or another, usually by an extension of the principle in Hedley Byrne & Co. Ltd. v. Heller & Partners Ltd., [1964] A.C. 465. See: White v. Jones; Whittingham v. Crease & Co. (1978), 88 D.L.R. (3d) 353 (B.C.S.C.); Ross v. Caunters, [1979] 3 All E.R. 580 (Ch. Div.); Watts v. Public Trustee for Western Australia, [1980] W.A.R. 97 (S.C.W.A.); Sutherland v. Public Trustee, [1980] 2 N.Z.L.R. 536 (S.C.); Gartside v. Sheffield, Young & Ellis, [1983] N.Z.L.R. 37 (C.A.); Hodgson v. Evans & Rice, [1983] A.J. No. 576 (Alta. Q.B.); Finlay v. Rowlands, Anderson & Hine, [1987] Tas.R. 60; Hawkins v. Clayton (1988), 164 C.L.R 539; Makhan v. McCawley, [1998] O.J. No. 1206, 158 D.L.R. (4th) 164, 58 O.T.C. 283, 22 E.T.R. (2d) 88; Smolinski v. Mitchell, [1995] B.C.J. No. 1789; [1995] 10 W.W.R. 68, 10 B.C.L.R. (3d) 366, 8 E.T.R. (2d) 247 (B.C.S.C.). The only authority cited to the contrary, a very detailed and carefully reasoned judgment, is that of the Supreme Court of Victoria in Seale v. Perry, [1982] V.R. 193. The dissenting speech of Lord Mustill in White v. Jones is also a trenchant statement of the case against liability.

24 The principle in Hedley Byrne has been made a part of the law of Canada by Haig v. Bamford, [1977] 1 S.C.R. 466. In the latter case, an accountant was found to be liable to an investor for negligence in the preparation of a financial statement where the investor had relied on the financial statement in making his decision to invest, nothwithstanding that the accountant and investor were strangers to each other. The accountants, in preparing the statement, were aware of the use to which the statement was to be put and assumed responsibility to that class of people to whom they knew it would be supplied, and owed a duty to them to take reasonable care. The investor had relied on the financial statement and had thereby suffered financial loss.

25 However, it is difficult to apply the Hedley Byrne principle to the relationship of lawyer and disappointed beneficiary. The work is clearly done for the testator, not the beneficiary. Perhaps more importantly, it cannot be said that the disappointed beneficiary has in any way relied on the exercise by the lawyer of proper care and skill.

26 There are many other problems in extending the liability of a lawyer to disappointed beneficiaries. They were analyzed and summarized by Lord Goff in White v. Jones the following way.

27 The first problem is that the relationship between a lawyer and client is usually contractual, and there can be no liability to a third party because of the doctrine of privity of contract. Furthermore, the scope of the lawyer’s duties to his client is fixed by the terms of the retainer, and at least in theory, the lawyer may protect himself by including terms in the retainer agreement. In the case of liability to a third party, this protection would be lost because there is no contract with the third party.

28 The second difficulty is that, while a lawyer may be concurrently liable to his client in contract and in tort, there is no duty of care owed by the lawyer to the disappointed beneficiary in tort (aside from assumption of responsibility under the principle in Hedley Byrne.) This is reinforced by the fact that the claim is one for purely financial loss, and no action lies in tort for such a loss. (This is not so in Canada: Rivtow Marine Ltd. v. Washington Iron Works, [1974] S.C.R. 1189, and University of Regina v. Pettick (1991), 77 D.L.R.(4th) 615.) Furthermore, the claim is one for a mere loss of expectation, as opposed to an existing right, and, again, no action lies in tort for such a loss. These claims fall in the zone of contractual liability rather than tortious liability.

29 A third argument against recognition of liability in tort is the difficulty of placing limits on cases in which liability would be allowed. Logically, liability would have to be imposed in cases of inter vivos gifts where the defect was for some reason irreparable. Logically, liability could not be limited to specific named beneficiaries and liability would have to be extended to indeterminate classes of persons who have been affected.

30 Finally, it would be illogical to impose a duty on the lawyer to the disappointed beneficiary when the testator himself owed no such duty. And recovery by a disappointed beneficiary from the lawyer would have the effect of increasing the size of the testator’s estate because it would not be possible to recover any part of the estate which had lawfully devolved on others even though it was not the testator’s intention.

31 Against these arguments, Lord Goff juxtaposed what he termed to be the reasons of justice which prompt judges and academic writers to conclude that a duty should be owed by the testator’s lawyer to a disappointed beneficiary.

32 Firstly, if no such duty is imposed, the only persons with a valid claim, the testator and his estate, have suffered no loss, and the only person who has suffered a loss, the disappointed beneficiary, has no claim. This indicates a lacuna in the law which needs to be filled.

33 Secondly, there exists a need to recognize the importance of the rights of persons to leave their property to whom they please and a need to rectify mistakes which frustrate those rights.

34 Thirdly, there is no injustice in making a lawyer whose negligence has defeated his client’s testamentary intentions liable to pay damages, even if the damages are payable direct to the disappointed beneficiary rather than to his client’s estate for the purpose of distribution to the disappointed beneficiary.

35 Finally, the public relies on lawyers to prepare effective wills. To deny an effective remedy amounts to a refusal to acknowledge a lawyer’s professional role in the community.

36 After balancing all of these factors, Lord Goff concluded as follows at p. 710:

In my opinion, therefore, your Lordships’ House should in cases such as these extend to the intended beneficiary a remedy under the Hedley Byrne principle by holding that the assumption of responsibility by the solicitor towards his client should be held in law to extend to the intended beneficiary who (as the solicitor can reasonably foresee) may, as a result of the solicitor’s negligence, be deprived of his intended legacy in circumstances in which neither the testator nor his estate will have a remedy against the solicitor. Such liability will not of course arise in cases in which the defect in the will comes to light before the death of the testator, and the testator either leaves the will as it is or otherwise continues to exclude the previously intended beneficiary from the relevant benefit.
37 He went on to note that his solution involved no unacceptable circumvention of the law of contract, that no problem arose by reason of the loss being purely economic, and that the assumption of responsibility would be subject to any term of the contract between the lawyer and the testator which might exclude or limit liability. Although the damages were for loss of expectation, he saw no reason to make a distinction between liability for contractual negligence where such damages were available and negligence arising under the Hedley Byrne principle.

38 As to the “spectre of solicitors being liable to an indeterminate class”, he pointed out that the ordinary case is one in which the intended beneficiaries are a small number of identified people. More difficult cases should be left until they are before the court.

39 Lord Browne-Wilkinson, in his concurring opinion, said at p. 717-18:

. . . [T]he law will develop novel categories of negligence incrementally and by analogy with established categories’. In my judgment, this is a case where such development should take place since there is a close analogy with existing categories of special relationship giving rise to a duty of care to prevent economic loss.
The solicitor who accepts instructions to draw a will knows that the future economic welfare of the intended beneficiary is dependent upon his careful execution of the task. It is true that the intended beneficiary (being ignorant of the instructions) may not rely on the particular solicitor’s actions. But, as I have sought to demonstrate, in the case of a duty of care flowing from a fiduciary liability is not dependent upon actual reliance by the plaintiff on the defendant’s actions but on the fact that, as the fiduciary is well aware, the plaintiff’s economic well-being is dependent upon the proper discharge by the fiduciary of his duty. Second, the solicitor by accepting the instructions has entered upon, and therefore assumed responsibility for, the task of procuring the execution of a skilfully drawn will knowing that the beneficiary is wholly dependent upon his carefully carrying out his function. That assumption of responsibility for the task is a feature of both the two categories of special relationship so far identified in the authorities. It is not to the point that the solicitor only entered on the task, pursuant to a contract with the third party (ie the testator). There are therefore present many of the features which in the other categories of special relationship have been treated as sufficient to create a special relationship to which the law attaches a duty of care. In my judgment the analogy is close.
40 The trial judge adopted the reasoning of the majority in White v. Jones. We agree that he was correct in so doing. There are two reasons for this.

41 Firstly, we agree with the reasoning of Lord Goff and Lord Browne-Wilkinson. The law as it existed prior to the series of judgments referred herein contained an anomaly when it left a lawyer free of liability for professional negligence, and a disappointed beneficiary without a remedy for a loss which occurred as a result of that negligence, in circumstances such as existed in this case. To use Lord Goff’s words, at p. 711:

Let me emphasise that I can see no injustice in imposing liability upon a negligent solicitor in a case such as the present where, in the absence of a remedy in this form, neither the testator’s estate nor the disappointed beneficiary will have a claim for the loss caused by his negligence. This is the injustice which, in my opinion, the judges of this country should address by recognising that cases such as these call for an appropriate remedy, and that the common law is not so sterile as to be incapable of supplying that remedy when it is required.
42 Secondly, as noted previously, the now numerous precedents in England, Australia, New Zealand and Canada overwhelmingly favour the same result. Academics and text-book writers generally favour it. The judgment in Seale v. Perry, decided in 1982, is the sole exception and it has not been followed elsewhere. The earliest precedents are almost 20 years old and do not seem to have created the problems predicted. As noted by Lord Goff, the law in Germany, France and the United States seems to be developing in the same way. All of this leads us to conclude that the principle stated in White v. Jones may be said to be so well established in most common law jurisdictions that it should be recognized as established in Saskatchewan as well.

Wills Lawyer Liable For Damages to Intended Beneficiary

Wills Lawyer Liable For Damages to Intended Beneficiary

Meier v Rose 2012 CarswellAlta 185 is a good example of a lawyer’s negligence in the preparation of a last will and testament, and the consequent damages awarded by the court against the lawyer in favor of the intended beneficiary who did not inherit.

The testator had given instructions to the solicitor to prepare a will for the next day.

The will was to have the provision specifically bequesting certain lands to the brother of the testator.

The solicitor prepare the will after obtaining the legal description of the property, but without properly ascertaining the ownership of the lands, and in particular, to verify that the deceased did in fact own the lands.

The deceased in fact did not own the lands at the time of his death, as they were owned by his limited company.

Accordingly the gift to the brother failed, and the brother subsequently brought action against the lawyer for negligence.

The action was allowed and damages in the amount of $482,200 were awarded.

The court found that the lawyer owed a duty of care not just to his client the testator, but also to the intended beneficiary of the lands.

The lawyer’s duty of care in carrying out the testator’s instructions in order to effectively confer the intended benefit to the brother, should have included the proper and necessary inquiries into the ownership of the lands, such as a land title search would have indicated.

If the lawyer had not been negligent in failing to ascertain the ownership of the lands, then the gift to the brother would not have failed.

For further reading on this topic please see the article entitled “Disappointed Beneficiary? Sue the Lawyer.