Edwards v. LSUC (2001), 153 O.A.C. 388 (SCC)
MLB headnote and full text
[French language version follows English language version]
[La version française vient à la suite de la version anglaise]
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Temp. Cite: [2001] O.A.C. TBEd. NO.072
John Edwards and Nancy Edwards on behalf of themselves and with leave of the court on behalf of the class herein described (appellants) v. Law Society of Upper Canada (respondent) and The Attorney General for Ontario and the Ontario Securities Commission (interveners) and Palmer Mills, Beverly Hoover and James Thomas Leslie Mills, Executors of the Estate of John T. Murray Mills, deceased, Sisto Consultants Inc., Maurice Carr, Jasper Naude, John Davison, Marilyn Davison, Arlene Woolcox, Jasbir Gill, Sisto Finance Inc., Camm-Tex International Inc. and Sisto Finance N.V. (defendants)
(28108; 2001 SCC 80)
Indexed As: Edwards et al. v. Law Society of Upper Canada et al.
Supreme Court of Canada
McLachlin, C.J.C., Gonthier, Major, Bastarache, Binnie, Arbour and LeBel, JJ.
November 16, 2001.
Summary:
The plaintiffs sued the Law Society of Upper Canada in negligence, for allegedly breaching a duty of care by failing to monitor the trust accounts of the defendant solicitor resulting in financial losses to the plaintiffs. The Law Society of Upper Canada, moved for dismissal of the claim against it on the ground that the claim disclosed no reasonable cause of action.
The Ontario Court (General Division), in a decision reported (1998), 48 O.T.C. 226, allowed the motion and dismissed the action against the Law Society. The plaintiffs appealed.
The Ontario Court of Appeal, in a decision reported 133 O.A.C. 286, dismissed the appeal. The plaintiffs appealed again.
The Supreme Court of Canada dismissed the appeal.
Actions – Topic 1622
Cause of action – Torts – What constitutes – [See
Barristers and Solicitors – Topic 7665
].
Barristers and Solicitors – Topic 7665
Regulation – Liability of governing bodies – Respecting exercise of disciplinary function – The plaintiffs sued the Law Society of Upper Canada in negligence, for allegedly breaching a duty of care by failing to monitor the trust accounts of the defendant solicitor resulting in financial losses to the plaintiffs – The Supreme Court of Canada held that the plaintiffs’ pleadings did not disclose a reasonable cause of action – The court held that no prima facie duty of care arose between the Law Society and the plaintiffs who deposited money into the solicitor’s trust, not as client’s but as participants in a third person business promotion.
Damages – Topic 531
Limits of compensatory damages – Remoteness – Torts – Recoverable damages – Purely economic loss – [See
Barristers and Solicitors – Topic 7665
].
Torts – Topic 77
Negligence – Duty of care – Relationship required to raise duty of care – [See
Barristers and Solicitors – Topic 7665
].
Torts – Topic 81
Negligence – Duty of care – Requirement that duty be owed to plaintiff – [See
Barristers and Solicitors – Topic 7665
].
Cases Noticed:
Cooper v. Registrar of Mortgage Brokers (B.C.) et al. (2001), 277 N.R. 113; 160 B.C.A.C. 268; 261 W.A.C. 268 (S.C.C.), appld. [para. 1].
Anns v. London Borough Council of Merton, [1978] A.C. 728 (H.L.), refd to. [para. 5].
Neilsen v. Kamloops (City) and Hughes, [1984] 2 S.C.R. 2; 54 N.R. 1; [1984] 5 W.W.R. 1; 29 C.C.L.T. 97; 8 C.L.R. 1; 10 D.L.R.(4th) 641, refd to. [para. 5].
French et al. v. Law Society of Upper Canada (1975), 61 D.L.R.(3d) 28 (Ont. C.A.), refd to. [para. 5].
Voratovic v. Law Society of Upper Canada (1978), 20 O.R.(2d) 214 (H.C.), refd to. [para. 5].
Calvert v. Law Society of Upper Canada (1981), 32 O.R.(2d) 176; 121 D.L.R.(3d) 169 (H.C.), refd to. [para. 5].
Lee v. Law Society of Upper Canada, [1994] O.J. No. 1468 (Gen. Div.), refd to. [para. 5].
Carnegie v. Rasmussen Starr Ruddy et al. (1994), 19 O.R.(3d) 272 (Gen. Div.), refd to. [para. 5].
Belanger (R.D.) & Associates Ltd. et al. v. Stadium Corp. of Ontario Ltd. and Bitove Corp. (1991), 57 O.A.C. 81; 5 O.R.(3d) 778 (C.A.), refd to. [para. 5].
Hunt v. T & N plc et al., [1990] 2 S.C.R. 959; 117 N.R. 321, refd to. [para. 5].
Hunt v. Carey Canada Inc. – see Hunt v. T & N plc et al.
Hercules Management Ltd. et al. v. Ernst & Young et al., [1997] 2 S.C.R. 165; 211 N.R. 352; 115 Man.R.(2d) 241; 139 W.A.C. 241, refd to. [para. 6].
Statutes Noticed:
Law Society Act, R.S.O. 1990, c. L-8, sect. 9 [para. 16]; sect. 27, sect. 33, sect. 60 [para. 14]; sect. 51 [para. 15]; sect. 61 [para. 15].
Counsel:
David E. Wires, Karen E. Jolley and Lisa D. La Horey, for the appellants;
W. Ross Murray, Q.C., and M. Christine Fotopoulos, for the respondent;
Sara Blake, for the intervener, the Attorney General for Ontario;
Neil Finkelstein and Johanna M. Superina, for the intervener, the Ontario Securities Commission.
Solicitors of Record:
McCague Wires Peacock Borlack McInnis & Lloyd, Toronto, Ontario, for the appellants;
Borden Ladner Gervais, Toronto, Ontario, for the respondent;
Attorney General for Ontario, Toronto, Ontario, for the intervener, the Attorney General for Ontario;
Ontario Securities Commission, Toronto, Ontario, for the intervener, the Ontario Securities Commission.
This appeal was heard on June 20, 2001, before McLachlin, C.J.C., Gonthier, Major, Bastarache, Binnie, Arbour and LeBel, JJ., of the Supreme Court of Canada. The judgment of the court was delivered in both official languages on November 16, 2001, by McLachlin, C.J.C. and Major, J.
