Caisse populaire d'Inkerman ltée v. Doiron, (1985) 61 N.B.R.(2d) 123 (CA)

• Judge: Richard, C.J.Q.B., La Forest and Angers, JJ.A.
• Court: Court of Appeal (New Brunswick)
• Case Date: October 31, 1984
• Jurisdiction: New Brunswick
• Citations: (1985), 61 N.B.R.(2d) 123 (CA);1985 CanLII 95 (NB CA);61 NBR (2d) 123;17 DLR (4th) 660;32 CCLT 73;158 APR 123;16 CLR 150

Caisse Pop. v. Doiron (1985), 61 N.B.R.(2d) 123 (CA);

    61 R.N.-B.(2e) 123; 158 A.P.R. 123

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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Caisse populaire d'Inkerman Ltée v. Doiron

(76/84/CA)

Indexed As: Caisse populaire d'Inkerman ltée v. Doiron

New Brunswick Court of Appeal

Richard, C.J.Q.B., La Forest and Angers, JJ.A.

March 13, 1985.

Summary:

The plaintiff credit union sued the defendant solicitor for professional negligence in failing to obtain certain security documents (guarantees) necessary to a mortgage transaction.

The New Brunswick Court of Queen's Bench, Trial Division, in a decision reported in 54 N.B.R.(2d) 274; 140 A.P.R. 274, allowed the credit union's action. The solicitor appealed.

The New Brunswick Court of Appeal allowed the appeal in part, affirming the solicitor's negligence, but finding that the credit union was contributorily negligent and reducing the damages awarded against the solicitor.

Banks and Banking - Topic 5144

Loans - Duties of bank - To examine loan documents - A solicitor was found negligent in failing to obtain guarantees in a mortgage transaction - The New Brunswick Court of Appeal held that the mortgagee was also negligent in giving the solicitor misleading instructions, and particularly in failing to examine the documentation prepared for it by the solicitor before disbursing the mortgage funds - The court stated that a financial institution should exercise care to see that its instructions are followed before parting with its money - See paragraphs 25 to 30.

Barristers and Solicitors - Topic 2588

Negligence - Failure to acquire security for loan advances - The New Brunswick Court of Appeal affirmed that a solicitor was negligent in failing to provide certain security documents (guarantees) in a mortgage transaction - The court held that although instructions to obtain guarantees were only expressly given respecting one specific guarantor, an ordinary prudent solicitor would have examined the accompanying documents or made inquiries to the mortgagee and thus would have discovered the requirement of obtaining other guarantees - See paragraphs 16 to 24.

Barristers and Solicitors - Topic 2663

Negligence - Damages - Measure of - The New Brunswick Court of Appeal stated that a negligent solicitor is liable for the damages arising from his failure to meet his professional duties - The court stated, however, that a solicitor is not an insurer against loss to his client - See paragraphs 76 to 77.

Barristers and Solicitors - Topic 2663

Negligence - Damages - Measure of - A solicitor was negligent and 50% at fault in failing to obtain guarantees in a mortgage transaction - The mortgagee was also negligent and 50% at fault in, inter alia, failing to examine the documentation prepared for it by the solicitor - In any event, the mortgagee could likely have collected from the guarantors (who were basically insolvent) only half of the amount for which they would otherwise be liable (i.e. deficiency after mortgage sale) - The New Brunswick Court of Appeal allowed the mortgagee to recover only 50% of one-half of the amount owing - See paragraphs 76 to 82, 87.

Barristers and Solicitors - Topic 2909

Negligence - Defences - Contributory negligence of client - A solicitor was negligent in failing to obtain guarantees in a mortgage transaction - The mortgagee was also negligent in, inter alia, failing to examine the documentation prepared for it by the solicitor - When the mortgage went in default, the mortgagee lost its right to recover from the intended guarantors - The New Brunswick Court of Appeal apportioned liability for the loss between the solicitor and the mortgagee at 50% each - See paragraphs 74 to 75.

Interest - Topic 5143

Interest as damages - Torts - Negligence, professional - A solicitor was negligent in failing to obtain guarantees as security to a mortgage - The mortgage went into default, but the mortgagee could not sue the intended guarantors - The New Brunswick Court of Appeal affirmed the awarding of damages to the mortgagee against the solicitor, plus interest at the rate set out in the mortgage (19%) from the date of the mortgage sale until the date of judgment - See paragraph 86.

Torts - Topic 6602

Defences - Contributory negligence - Application of contributory negligence statutes - The New Brunswick Court of Appeal stated that it would have "considerable hesitation" in applying the New Brunswick Contributory Negligence Act directly in a case founded on contract - See paragraphs 50 to 51.

Torts - Topic 6603

Defences - Contributory negligence - Apportionment of fault - Breach of contract - The New Brunswick Court of Appeal discussed the application of the concept of contributory negligence and apportionment of fault to contract cases where the breach of contract flowed from negligent action - See paragraphs 32 to 75.

Torts - Topic 6603

Defences - Contributory negligence - Apportionment of fault - Breach of contract - A solicitor was negligent in failing to obtain guarantees in a mortgage transaction - The mortgagee was also negligent in, inter alia, failing to examine the documentation prepared for it by the solicitor - As a result the mortgagee lost its right to recover from the intended guarantors when the mortgage went into default - The New Brunswick Court of Appeal applied the concept of contributory negligence to the solicitor's negligent breach of contract and apportioned liability for the loss between the solicitor and the mortgagee at 50% each - See paragraphs 74 to 75.

Cases Noticed:

The "Tasmania", [1890] 15 A.C. 223 (H.L.), refd to. [para. 32].

Royal Bank of Canada v. Clark and Watters (1978), 22 N.B.R.(2d) 693; 39 A.P.R. 693, refd to. [para. 33].

New Brunswick Telephone Co. Ltd. v. John Maryon International Ltd. (1982), 43 N.B.R.(2d) 469; 113 A.P.R. 469; 141 D.L.R.(3d) 193, refd to. [para. 33].

Nocton v. Lord Ashburton, [1914] A.C. 932, refd to. [para. 34].

Groom v. Crocker, [1939] 1 K.B. 194 (C.A.), refd to. [para. 34].

Esso Petroleum Co. Ltd. v. Mardon, [1976] 2 All E.R. 5 (C.A.), refd to. [para. 34].

Midland Bank Trust Co. Ltd. v. Hett, Stubbs & Kemp, [1978] 3 All E.R. 571, refd to. [para. 34].

Nance v. British Columbia Electric Railway Company Ltd., [1951] A.C. 601, refd to. [para. 36].

Morash v. Lockhart & Ritchie Ltd. (1979), 24 N.B.R.(2d) 180; 48 A.P.R. 180, refd to. [para. 38].

LaFarge Cement etc. Ltd. v. C.N.R. (1962), 34 D.L.R.(2d) 154 (B.C.S.C.), refd to. [para. 40].

Okanagan Mainline Real Estate Board v. Can. Indemnity Co. (1968), 70 D.L.R.(2d) 516 (B.C.S.C.), refd to. [para. 40].

Truman v. Sparling Real Estate Ltd. (1977-1978), 3 C.C.L.T. 205 (B.C.S.C.), refd to. [para. 40].

West Coast Finance Ltd. v. Gunderson, Stokes, Walton & Co. (1974), 44 D.L.R.(2d) 232 (B.C.S.C.), refd to. [para. 40].

Carmichael v. Mayo Lumber Co. Ltd. (1978), 85 D.L.R.(3d) 538 (B.C.S.C.), refd to. [para. 40].

Husky Oil Operation Ltd. v. Oster (1978), 87 D.L.R.(3d) 86 (Sask. Q.B.), refd to. [para. 40].

Palmer v. Littleton, [1979] 4 W.W.R. 577 (B.C.S.C.), refd to. [para. 40].

Finance America v. Speed and Speed (1980), 38 N.S.R.(2d) 374; 69 A.P.R. 374 (N.S.C.A.), refd to. [para. 40].

Canadian Western v. Pathfinder Surveys (1980), 21 A.R. 459 (Alta. C.A.), refd to. [para. 40].

Tompkins Hardware Ltd. v. North Western Flying Services (1983), 139 D.L.R.(3d) 329 (Ont. H.C.), refd to. [para. 40].

Ribic v. Weinstein (1983), 140 D.L.R.(3d) 258 (Ont. H.C.), refd to. [para. 40].

Norcen Energy Resources v. Flint Engineering (1984), 51 A.R. 43 (Alta. Q.B.), refd to. [para. 40].

Revelstoke Credit Union v. Miller (1984), 28 C.C.L.T. 17 (B.C.S.C.), refd to. [para. 40].

H.E. Kane v. Coopers & Lybrand (1983), 44 N.B.R.(2d) 374; 116 A.P.R. 374 (N.B.Q.B.), refd to. [para. 40].

Caines v. Bank of Nova Scotia (1978), 22 N.B.R.(2d) 631; 39 A.P.R. 631, refd to. [para. 41].

Cosyns v. Smith (1984), 146 D.L.R.(3d) 622, refd to. [para. 41].

Webb Real Estate Ltd. et al. v. McInnis et al. and Smith et al., [1978] 2 S.C.R. 1357; 19 N.R. 608; 25 N.S.R.(2d) 272; 36 A.P.R. 272, refd to. [para. 42].

Quinn v. Burch Bros. (Builders) Ltd., [1966] 2 Q.B. 370, refd to. [para. 44].

Sole v. W.J. Hallt Ltd., [1973] 1 Q.B. 574 (C.A.), refd to. [para. 44].

Artingstoll v. Hewen's Garages Ltd., [1973] R.T.R. 197 (Q.B.), refd to. [para. 44].

De Meza v. Apple, [1974] 1 Lloyd's Rep. 508 (Q.B.), refd to. [para. 44].

Sayers v. Harlow U.D.C., [1958] 2 All E.R. 342 (C.A.), refd to. [para. 44].

Pacific Acceptance Corporation Ltd. v. Forsyth et al. (1967), 92 W.N. 29, refd to. [para. 47].

Simonius Vischer & Co. v. Holt & Thompson, [1979] 2 N.S.W.L.R. 322, refd to. [para. 47].

Belous v. Willetts, [1970] V.R. 45, refd to. [para. 47].

A.S. James Pty. Ltd. v. C.B. Duncan, [1970] V.R. 705, refd to. [para. 47].

Read v. Nerey Nominees Pty. Ltd., [1979] V.R. 47, refd to. [para. 47].

Queen's Bridge Co. v. Edwards, [1964] Tas. S.R. 93, refd to. [para. 47].

Smith v. Buckley, [1965] Tas. S.R. 210, refd to. [para. 47].

Finelli et al. v. Dee et al. (1968), 67 D.L.R.(2d) 393 (Ont. C.A.), refd to. [para. 48].

Distributeur Norbec Enrg. and Gagnon v. Daigle (Clarence) & Fils Ltée (1985), 57 N.B.R.(2d) 269; 148 A.P.R. 269, refd to. [para. 48].

Dominion Chain Co. v. Eastern Construction Co. Ltd. (1976), 68 D.L.R.(3d) 385; affd. [1978] 2 S.C.R. 1346; 19 N.R. 298, refd to. [para. 52].

Giffels Associates Limited v. Eastern Construction Company Limited, [1978] 2 S.C.R. 1346; 19 N.R. 298, affirming 68 D.L.R.(2d) 385, refd to. [para. 52].

Young v. Grote (1827), 4 Bing. 253; 130 E.R. 764, refd to. [para. 54].

London Joint Stock Bank v. MacMillan and Arthur, [1918] A.C. 777, refd to. [para. 54].

Morgan v. Ravey (1861), 6 H. & N. 265; 158 E.R. 109, refd to. [para. 54].

Butterfield v. Forrester (1809), 11 East 60; 103 E.R. 926, refd to. [para. 56].

Gee v. Metropolitan Railway Co. (1873), 8 Q.B. 161, refd to. [para. 63].

Brookes v. London Passenger Transport Board, [1947] 1 All E.R. 506, refd to. [para. 63].

Warburton v. The Midland Railway Company (1870), 21 L.T.(N.S.) 835, refd to. [para. 63].

Hadley v. Baxendale (1854), 9 Ex. 341; 156 E.R. 145, appld. [para. 66].

Davis Contractors Ltd. v. Fareham Urban District Council, [1956] A.C. 696, refd to. [para. 73].

Brumer v. Gunn, [1983] 1 W.W.R. 424; 18 Man.R.(2d) 155 (Man. Q.B.), refd to. [para. 77].

Bossé(e) v. Clavette et al. (1984), 56 N.B.R.(2d) 375; 146 A.P.R. 375, refd to. [para. 77].

Albert v. Pelletier (1984), 54 N.B.R.(2d) 189; 140 A.P.R. 189, refd to. [para. 77].

Kitchen v. Royal Air Forces Association et al., [1958] 1 All E.R. 240, refd to. [para. 77].

Page v. Barrister (1971), 3 N.B.R.(2d) 773 (N.B.C.A.), refd to. [para. 77].

Fyk v. Millar (1974), 2 O.R.(2d) 39 (Ont. H.C.), refd to. [para. 77].

Gouzenko v. Harris et al. (1976-77), 1 C.C.L.T. 37 (Ont. H.C.), refd to. [para. 77].

Nova Scotia Savings and Loan Company v. M.R.B. Contractors (1978), 23 N.B.R.(2d) 218; 44 A.P.R. 218, appld. [para. 86].

Statutes Noticed:

Contributory Negligence Act, R.S.N.B. 1973, c. C-19, sect. 1(1) [para. 50].

Authors and Works Noticed:

Poulton, W.D.C., Tort or Contract (1966), 82 L.Q.R. 346 [para. 34].

Ogilvie, H.M., Contract - Limitation and Exclusion Clauses - Fundamental Breach - Statutory Reasonableness (1984), 62 Can. Bar Rev. 389 [para. 39].

Bridges, Michael G., Defective Products, Contributory Negligence, Apportionment of Loss and the Distribution Chain (1981-82), 6 Can. Bus. Law J. 184 [para. 45]; p. 197, n. 62 [para. 49].

Blom, Joost, The Evolving Relationship Between Tort and Contract [para. 45].

Hatherley, Mary, Contributory Negligence and Contracts (1984) [para. 45].

Ogilvie, M.H., John Maryon International Ltd. v. New Brunswick Telephone Co. Ltd.: Some Notes Toward An Obligations Theory of Concurrent Liability in Contract and Tort (1984), 10 Queen's L.J. [para. 45].

Report on Contribution, Eng. Law Com. No. 79 (1977) [para. 48].

Report on Contributory Negligence and Concurrent Liability, Alberta Institute of Law Research and Reform (1969), p. 25 [para. 48].

Williams, Glanville, Joint Torts and Contributory Negligence, pp. 69 et seq., 214-215 [para. 53].

Winfield, P.H., Textbook of The Law of Tort (2nd Ed.), pp. 452 et seq. [para. 57].

Fleming, The Law of Torts (6th Ed.), pp. 242-243 [para. 57].

Taggart, M.B., Contributory Negligence: Is the Law of Contract Relevant? (1977), 3 Auckland U.L. Rev. 140 [para. 67].

Fridman, The Law of Contract in Canada, pp. 558-559 [para. 7]; pp. 562-563, no. 9 [para. 68].

Gilmore, Grant, The Death of Contract, p. 50 [para. 71].

Counsel:

Pierre R. Tremblay, for the appellant;

Thomas W. Riordan, Q.C., for the respondent.

This appeal was heard before Richard, C.J.Q.B., La Forest and Angers, JJ.A., of the New Brunswick Court of Appeal on October 31, 1984. The decision of the Court of Appeal was delivered on March 13, 1985, when the following opinions were filed:

La Forest, J.A. - see paragraphs 1 to 89;

Angers, J.A. - see paragraph 90.

Richard, C.J.Q.B., concurred with La Forest, J.A.