Budrewicz v. Stojanowski et al., (1998) 70 O.T.C. 253 (GD)

• Judge: Webber, J.
• Court: Ontario Court of Justice General Division (Canada)
• Case Date: July 14, 1998
• Jurisdiction: Ontario
• Citations: (1998), 70 O.T.C. 253 (GD)

Budrewicz v. Stojanowski (1998), 70 O.T.C. 253 (GD)

MLB headnote and full text

Temp. Cite: [1998] O.T.C. TBEd. JL.095

Maria Budrewicz (plaintiff) v. Joseph Kazimierz Stojanowski, Mazzucco & Boguski and Stanley F. Boguski (defendants)

(File No. C31264/95)

Indexed As: Budrewicz v. Stojanowski et al.

Ontario Court of Justice

General Division

Webber, J.

July 14, 1998.

Summary:

Budrewicz, a 74 year old widow, received over $100,000 from the sale of her condominium. She decided to invest $80,000. Stojanowski, a family friend, told her that he could get her 15% per year. Budrewicz loaned the money to Stojanowski. Stojanowski intended to loan the money to the Simkhaevs at 20% interest secured by a fourth mortgage. The Simkhaevs owned a $500,000 home that was subject to three mortgages totalling $411,000. Stojanowski retained Boguski, a lawyer, to draw up a mortgage. Budrewicz's certified cheque was deposited into Boguski's law firm's trust account. Boguski was not informed that the money came from Budrewicz. Boguski advanced the money to the Simkhaevs. The mortgage proceeds were used to discharge the third mortgage valued at $40,000. Therefore, Stojanowski became a third mortgagee subject to first and second mortgages valued at $371,000. Subsequently, Stojanowski had Boguski prepare a promissory note in favour of Budrewicz in the amount of $80,000 with 15% interest. This was the first occasion that Boguski became aware that the money came from Budrewicz. Boguski also prepared an affidavit of acknowledgement and direction at Stojanowski's request. The Simkhaevs subsequently defaulted and the property was sold by one of the prior mortgagees. There were insufficient funds to satisfy the third mortgage. Budrewicz sued Stojanowski under the promissory note (Stojanowski had declared bankruptcy). Budrewicz also sued Boguski and his firm for damages for breach of duty and negligence.

The Ontario Court (General Division) granted judgment against Stojanowski. The court dismissed the action against Boguski and his firm, where there was no solicitor-client or fiduciary relationship. Budrewicz could not have reasonably relied on Boguski. Further, Boguski did not have a duty of care to Budrewicz.

Barristers and Solicitors - Topic 1504

Relationship with client - Solicitor-client relationship - What constitutes - See paragraphs 66, 81.

Barristers and Solicitors - Topic 4441

Relations with third parties - Duty to third parties - See paragraphs 68 to 81.

Barristers and Solicitors - Topic 4450

Relations with third parties - Duty to third parties - Requirement of reliance - See paragraphs 68 to 81.

Equity - Topic 3607

Fiduciary or confidential relationships - General principles - Relationships which are not fiduciary - See paragraphs 67 to 81.

Cases Noticed:

Donoghue v. Stevenson, [1932] A.C. 562 (H.L.), refd to. [para. 68].

Anns v. Merton London Borough Council, [1978] A.C. 728 (H.L.), refd to. [para. 68].

Midland Bank Trust Co. v. Hett, Stubbs & Kemp, [1979] Ch. 384; [1978] 3 All E.R. 571, refd to. [para. 68].

Hedley Byrne & Co. v. Heller & Partners Ltd., [1964] A.C. 465 (H.L.), refd to. [para. 69].

Dutton v. Bognor Regis Urban District Council, [1972] 1 Q.B. 373 (C.A.), refd to. [para. 71].

Kamahap Enterprises v. Chu's Central Market Ltd. (1989), 64 D.L.R.(4th) 167 (B.C.C.A.), refd to. [para. 72].

Luckiw Holdings (1980) Ltd. v. Murphy (1986), 80 A.R. 14 (C.A.), refd to. [para. 74].

Feschuk v. Hudema and Ziegler (1994), 126 Sask.R. 26 (Q.B.), refd to. [para. 75].

Authors and Works Noticed:

Rolph, Debra, Solicitors' Liability to Non-Clients in Negligence, Vol. 15, No. 2, June, 1993, p. 171 [para. 73].

Counsel:

Wolfgang Kaufmann, for the plaintiff;

Mark L.J. Edwards, for the defendants, Mazzucco & Boguski and Stanley F. Boguski;

Joseph Stojanowski, appearing on his own behalf.

This action was heard before Webber, J., of the Ontario Court (General Division), who delivered the following judgment on July 14, 1998.