Bloor Italian Gifts Ltd. et al. v. Dixon et al., (2000) 133 O.A.C. 338 (CA)

• Judge: Abella, Goudge and MacPherson, JJ.A.
• Court: Court of Appeal (Ontario)
• Case Date: April 04, 2000
• Jurisdiction: Ontario
• Citations: (2000), 133 O.A.C. 338 (CA)

Bloor Italian Gifts Ltd. v. Dixon (2000), 133 O.A.C. 338 (CA)

MLB headnote and full text

Temp. Cite: [2000] O.A.C. TBEd. MY.061

Bloor Italian Gifts Limited, Matteo Lauriola and Claudia Lauriola (plaintiffs/appellant) v. Douglas M. Dixon and Arkay and Dixon, a partnership (defendants/respondents)

(C32874)

Indexed As: Bloor Italian Gifts Ltd. et al. v. Dixon et al.

Ontario Court of Appeal

Abella, Goudge and MacPherson, JJ.A.

May 25, 2000.

Summary:

The plaintiff corporation operated a retail store. The personal plaintiffs were its sole shareholders. The defendant Dixon was an accountant who had prepared annual finan­cial statements for the plaintiffs. Between 1985 and 1991, the plaintiff corporation failed to remit approximately $1,135,367 in retail sales taxes (RST). The Ministry of Revenue assessed the plaintiff corporation for the unremitted tax, interest and penalties. The plaintiffs sued the defendant accountant in tort and contract, claiming for the penal­ties, interest and costs arising from the assessment. The plaintiffs alleged that the failure to remit the proper RST was a conse­quence of not being properly instructed by the defendant in the use of the cash register and daily reporting forms and the defen­dant's failure to periodically monitor pay­ment of taxes. The plaintiffs also added a claim arising from the defendant's alleged tardiness in submitting a federal sales tax rebate application.

The Ontario Court (General Division), in a decision reported 34 O.T.C. 171, dismissed the claim arising from the unremitted RST, but allowed the claim arising from the late filing of the federal sales tax rebate ap­plica­tion. The plaintiffs were awarded judg­ment for $8,213, the amount of interest for the six months that the rebate was delayed, plus $2,053 prejudgment interest. The plain­tiffs appealed the dismissal of its claim arising from the unremitted RST. The defen­dant cross-appealed.

The Ontario Divisional Court, Ferguson, J., dissenting, in a decision reported 125 O.A.C. 384, dismissed the appeal and the cross-appeal. The plaintiff corporation appealed. The defendants cross-appealed on the ques­tion of damages. Particularly, the defendants asserted that if the plaintiff's appeal was allowed, the damages it received should be reduced substantially because of its own contributory negligence in failing to detect the retail tax problem.

The Ontario Court of Appeal allowed the appeal.

Contracts - Topic 2121

Terms - Express terms - Exclusionary clauses - Persons entitled to benefit of - [See Professional Occupations - Topic 1464 ].

Professional Occupations - Topic 1463

Accountants - Negligence - Duty of care - [See Professional Occupations - Topic 1464 ].

Professional Occupations - Topic 1464

Accountants - Negligence - Standard of care - The plaintiff corporation operated a retail store - The defendant was the ac­countant who had prepared annual finan­cial statements for the corporation - Be­tween 1985 and 1991, the corporation failed to remit approximately $1,135,367 in retail sales taxes (RST) - The Ministry of Revenue assessed the plaintiff cor­poration for the unremitted tax, interest and penalties - The corporation et al. sued the defendant for, inter alia, negligence - The corporation alleged that the failure to remit the proper RST was a consequence of its owners not being properly instructed by the defendant in the use of the cash register and daily reporting forms and the defendant's failure to periodically monitor payment of taxes when preparing financial statements etc. - The Ontario Court of Appeal agreed - However, the court held that the accountant and the corporation were both negligent - Liability was as­sessed to each of 50% - The error was blatant and should have been picked up by both parties - The court further held that the limitation clause in the parties' contract did not apply to exempt the accountant from liability.

Professional Occupations - Topic 1473

Accountants - Negligence - Reviews (non-audit) - [See Professional Occupations - Topic 1464 ].

Professional Occupations - Topic 1585

Accountants - Duty to client - Preparing financial statements - [See Professional Occupations - Topic 1464 ].

Torts - Topic 49

Negligence - Standard of care - Particular persons and relationships - Accountants - [See Professional Occupations - Topic 1464 ].

Torts - Topic 92

Negligence - Duty of care - Contractual exclusions or limitations - [See Profes­sional Occupations - Topic 1464 ].

Torts - Topic 6601

Defences - Contributory negligence - What constitutes contributory negligence - [See Professional Occupations - Topic 1464 ].

Torts - Topic 6963

Defences - Disclaimer or exclusion of risk - Persons entitled to rely on - [See Profes­sional Occupations - Topic 1464 ].

Cases Noticed:

Central Trust Co. v. Rafuse and Cordon, [1986] 2 S.C.R. 147; 69 N.R. 321; 75 N.S.R.(2d) 109; 186 A.P.R. 109; 31 D.L.R.(4th) 481; 37 C.C.L.T. 117; 42 R.P.R. 161; 34 B.L.R. 187, refd to. [para. 16].

Haig v. Bamford, [1977] 1 S.C.R. 466; 9 N.R. 43, refd to. [para. 16].

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; 146 D.L.R.(4th) 577, refd to. [para. 25].

Neuzen v. Korn, [1995] 3 S.C.R. 674; 188 N.R. 161; 64 B.C.A.C. 241; 105 W.A.C. 241; [1995] 10 W.W.R. 1, refd to. [para. 31].

BG Checo International Ltd. v. British Columbia Hydro & Power Authority, [1993] 1 S.C.R. 12; 147 N.R. 81; 20 B.C.A.C. 241; 35 W.A.C. 241, refd to. [para. 40].

Statutes Noticed:

Negligence Act, R.S.O. 1990, c. N-1, sect. 3 [para. 49].

Authors and Works Noticed:

Jackson and Powell, Professional Negli­gence (1997), p. 827 [para. 25].

Linden, Allen M., Canadian Tort Law (6th Ed. 1997), p. 99 [para. 33].

Counsel:

Jeffrey S. Leon and David A. Hausman, for the appellant;

Michael E. Girard for the respondents.

This appeal was heard on April 4, 2000, before Abella, Goudge and MacPherson, JJ.A., of the Ontario Court of Appeal. On May 25, 2000, MacPherson, J.A., delivered the following decision for the court.