Haig v. Bamford et al., [1977] 1 S.C.R. 466 (1976)
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Haig v. Bamford et al., [1977] 1 S.C.R. 466 (1976)
SUPREME COURT OF
CANADAHaig v. Bamford et al., [1977] 1 S.C.R. 466Date: 1976-04-01Gordon T. Haig (Plaintiff) Appellant; andRalph L. Bamford, Nairn Hagan, Alfred R. Wickens and John Gibson (Defendants) Respondents.1975: November 13, 14; 1976: April 1.Present: Laskin C.J. and Martland, Judson, Ritchie, Spence, Pigeon, Dickson. Beetz and de Grandpré JJ.ON APPEAL FROM THE COURT OF APPEAL FOR SASKATCHEWANNegligence - Chartered accountants - Preparation of defective financial statement - Statement relied on by investor to his loss - Identity of investor not known to accountants - Right of recovery.One Scholler carried on a woodworking business as sole proprietor. Early in 1964, following a fire, the Saskatchewan Economic Development Corporation (Sedco) agreed to advance Scholler $34,000 for the purpose of establishing a plant to undertake millwork and the manufacture of furniture, conditional upon incorporation of the sole proprietorship. A company was incorporated and some months later it became apparent that there was a serious shortage of working capital. Scholler approached Sedco for a further loan of $20,000 which was approved, contingent upon (i) production of a satisfactory audited financial statement of the company for the period from the date of incorporation, February 10, 1964, to March 31, 1965, and (ii) the infusion of $20,000 of equity capital.Instructions were issued to a firm of chartered accountants, of which the respondents were partners, to prepare the required financial statement and Scholler began a search for an outside investor. He made it known to the accountants that he was seeking an investor. The statement, when completed, showed that the operations of the company were profitable; the potential was promising, and a $20,000 loan from Sedco and $20,000 of equity money would provide necessary working capital. Influenced by these considerations, the appellant purchased in mid-August, 1965, shares in the capital stock of the company for $20,075 and guaranteed the bank loan to the extent of $20,000.Notwithstanding the addition of $40,000 in ...See the full content of this document
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