MacCulloch v. McInnes, Cooper & Robertson, 2001 NSCA 8

• Judge: Freeman, Bateman and Cromwell, JJ.A.
• Court: Court of Appeal of Nova Scotia (Canada)
• Case Date: January 19, 2001
• Jurisdiction: Nova Scotia
• Citations: 2001 NSCA 8;(2001), 189 N.S.R.(2d) 324 (CA)

MacCulloch v. McInnes, Cooper (2001), 189 N.S.R.(2d) 324 (CA);

 590 A.P.R. 324

MLB headnote and full text

Temp. Cite: [2001] N.S.R.(2d) TBEd. JA.024

McInnes, Cooper & Robertson, a registered Partnership, and Stewart McInnes, Q.C. (appellants/respondents on cross-appeal) v. Patricia B. MacCulloch (respondent/appellant on cross-appeal)

(C.A. No. 165211; 2001 NSCA 8)

Indexed As: MacCulloch v. McInnes, Cooper & Robertson

Nova Scotia Court of Appeal

Freeman, Bateman and Cromwell, JJ.A.

January 19, 2001.

Summary:

MacCulloch, one of the executors of her deceased husband's estate, purchased estate assets for $500,000 (appraised value) without disclosing a previous agreement to sell the assets to a third party for $1,800,000. After the estate subsequently went bankrupt, the Trustee in Bankruptcy successfully sued MacCulloch for a declaration that she held the sales proceeds in trust for the estate. Subsequently, the judgment was set off against MacCulloch's share of the estate. MacCulloch brought a negligence action for damages against the solicitor who repre­sented her respecting the agreement to pur­chase the estate assets.

The Nova Scotia Supreme Court, in a judgment reported 184 N.S.R.(2d) 40; 573 A.P.R. 40, found the solicitor negligent for arranging the sale without court approval. It was negligent to be unaware of the restric­tions on an executor buying estate property and in concluding that MacCulloch would be protected if the beneficiaries all signed off. The court rejected the solicitor's submission that MacCulloch would not have heeded the correct advice, had it been given. That sub­mission was too speculative. Damages equalled the $61,930.50 in legal fees incurred by MacCulloch in defending the action by the Trustee plus the legal costs paid by the Trustee which were attributable to the action. The solicitor appealed the finding of negligence. MacCulloch cross-appealed, seeking increased damages.

The Nova Scotia Court of Appeal dis­missed both the appeal and cross-appeal. The trial judge did not err in finding negligence or in assessing damages.

Barristers and Solicitors - Topic 2592

Negligence - Preparation and execution of documents - A widow was one of the executors of her deceased husband's estate - She purchased estate assets for $500,000 (appraised value) without disclosing a previous agreement to sell the assets to a third party for $1,800,000 - After the estate subsequently went bankrupt, the Trustee in Bankruptcy successfully sued the widow for breach of fiduciary duty - She held the sales proceeds in trust for the estate - The widow brought a negligence action for damages against her solicitor, submitting that he should have advised her to obtain court approval for the agreement to purchase - The trial judge found the solicitor negligent for arranging the sale without court approval - It was negligent to be unaware of the restrictions on an executor buying estate property and in concluding that the widow would be pro­tected by the beneficiaries signing off - The trial judge rejected the solicitor's speculative submission that the widow would not have heeded the correct advice, had it been given - Damages equalled the legal fees incurred by the widow in de­fending the action by the Trustee plus the legal costs paid by the Trustee which were attributable to the action - The Nova Scotia Court of Appeal dismissed the solicitor's appeal against negligence and Mac­Culloch's cross-appeal respecting damages - The solicitor was negligent in not giving the correct advice and in negli­gently ar­ranging a sale that was voidable - Causa­tion was established - Further, the trial judge did not err in assessing dam­ages.

Barristers and Solicitors - Topic 2594

Negligence - Failure to inform or advise client - [See Barristers and Solicitors - Topic 2592 ].

Barristers and Solicitors - Topic 2663

Negligence - Damages - Measure of - [See Barristers and Solicitors - Topic 2592 ].

Cases Noticed:

Price Waterhouse Ltd. v. MacCulloch (1986), 69 N.S.R.(2d) 167; 163 A.P.R. 167 (S.C.), refd to. [para. 8].

Price Waterhouse Ltd. v. MacCulloch (1986), 72 N.S.R.(2d) 1; 173 A.P.R. 1 (C.A.), refd to. [para. 9].

Price Waterhouse Ltd. v. MacCulloch, [1986] N.S.J. 540 (S.C.), refd to. [para. 10].

Toneguzzo-Norvell et al. v. Savein and Burnaby Hospital (1994), 162 N.R. 161; 38 B.C.A.C. 193; 62 W.A.C. 193 (S.C.C.), refd to. [para. 17].

Canada (Attorney General) v. Dingle et al. (2000), 181 N.S.R.(2d) 302; 560 A.P.R. 302 (C.A.), refd to. [para. 18].

Spence v. Bell, [1982] 6 W.W.R. 385; 39 A.R. 239 (C.A.), refd to. [para. 22].

Tiffen v. Millican et al. (1965), 49 D.L.R.(2d) 216 (Alta. S.C.), refd to. [para. 22].

Midland Bank Trust Co. v. Hett, Stubbs & Kemp, [1978] 3 All E.R. 571 (Ch. D.), refd to. [para. 23].

Bannerman & Co. v. Murray & Anor, [1972] N.Z.L.R. 411, refd to. [para. 35].

Central Trust Co. v. Rafuse and Cordon (1987), 69 N.R. 321; 75 N.S.R.(2d) 109; 186 A.P.R. 109 (S.C.C.), refd to. [para. 39].

Groom v. Crocker, [1939] 1 K.B. 194, refd to. [para. 44].

Major v. Buchanan (1975), 61 D.L.R.(3d) 46 (Ont. H.C.), refd to. [para. 44].

Mouat v. Clark Boyce (1993), 159 N.R. 311 (P.C.), dist. [para. 46].

Canada Trust Co. v. Sorkos (1992), 90 D.L.R.(4th) 265 (Ont. Gen. Div.), refd to. [para. 57].

Sykes v. Midland Bank Executor and Trustee Co., [1970] 2 All E.R. 471 (C.A.), refd to. [para. 59].

Snell v. Farrell (1990), 110 N.R. 200; 107 N.B.R.(2d) 94; 267 A.P.R. 94; 72 D.L.R.(4th) 289 (S.C.C.), refd to. [para. 63].

Alphacell Ltd. v. Woodward, [1972] 2 All E.R. 475 (H.L.), refd to. [para. 63].

Allied Maple v. Simmons & Simmons, [1995] 4 All E.R. 907, refd to. [para. 64].

Brown v. KMR Services Ltd., [1995] 4 All E.R. 598 (C.A.), refd to. [para. 68].

Bristol and West Building Society v. Mothew, [1996] 4 All E.R. 698 (C.A.), refd to. [para. 71].

Weagle v. Weagle, [1955] 3 D.L.R. 58 (N.S.C.A.), refd to. [para. 75].

Schloss v. Koehler et al. (1978), 8 A.R. 559; 4 Alta. L.R.(2d) 85 (T.D.), affd. (1979), 107 A.R. 96; 71 Alta. L.R.(2d) 399 (C.A.), refd to. [paras. 82, 84].

285614 Alberta Ltd. v. Burnet, Duckworth & Palmer (1993), 139 A.R. 1; 8 Alta. L.R.(3d) 212 (Q.B.), refd to. [para. 84].

MacCulloch (Bankrupt), Re (1992), 108 N.S.R.(2d) 130; 294 A.P.R. 130 (C.A.), refd to. [para. 91].

Toronto Industrial Leaseholds Ltd. v. Posesorski et al. (1994), 75 O.A.C. 263; 21 O.R.(3d) 1 (C.A.), refd to. [para. 119].

MacCulloch Estate, Re (1989), 93 N.S.R.(2d) 226; 242 A.P.R. 226 (S.C.), varied (1992), 108 N.S.R.(2d) 130; 294 A.P.R. 130 (C.A.), refd to. [para. 120].

Authors and Works Noticed:

Cordery on Solicitors (10th Ed.), vol. 1, p. J/305 [para. 42].

Halsbury's Laws of England (3rd Ed.), p. 99 [para. 35].

Waters, D.W.M., Law of Trusts in Canada (1974), pp. 627 [para. 72]; 628 [para. 73]; 630 [para. 74].

Counsel:

John P. Merrick, Q.C., for the appellants;

Patricia MacCulloch, on her own behalf.

This appeal and cross-appeal were heard on November 29, 2000, before Freeman, Bateman and Cromwell, JJ.A., of the Nova Scotia Court of Appeal.

On January 19, 2001, Bateman, J.A., delivered the following judgment for the Court of Appeal.