MacDonald Estate, Re, (1993) 89 Man.R.(2d) 161 (QB)

• Judge: Schwartz, J.
• Court: Court of Queen's Bench of Manitoba (Canada)
• Case Date: August 20, 1993
• Jurisdiction: Manitoba
• Citations: (1993), 89 Man.R.(2d) 161 (QB)

MacDonald Estate, Re (1993), 89 Man.R.(2d) 161 (QB)

MLB headnote and full text

William Hamilton Gray, Administrator with Will Annexed of the Estate of John Edwin MacDonald (plaintiff) v. William Steward Arnold Martin and Rossmere Holdings (1970) Limited (defendants)

(File No. CI 83-01-01149)

Indexed As: MacDonald Estate, Re

Manitoba Court of Queen's Bench

Winnipeg Centre

Schwartz, J.

August 20, 1993.

Summary:

The administrator of the MacDonald Estate sued Martin, who had been MacDonald's lawyer and business partner and then execu­tor of MacDonald's estate. The administrator alleged breach of fiduciary duty towards MacDonald and his estate and an inaccurate accounting. He sought recasting of Martin's various transactions. He also sought punitive damages. Martin counterclaimed for monies owed him by the estate.

The Manitoba Court of Queen's Bench held that there was a breach of fiduciary duty, recast various transactions and awarded punitive damages. The court dismissed the counterclaim.

Barristers and Solicitors - Topic 1548

Relationship with client - Duty to client - Fiduciary duty - [See Partnership - Topics 5161, 5163 ].

Damage Awards - Topic 2030.5

Exemplary or punitive damages - Breach of fiduciary duty - Martin was Mac­Donald's lawyer, business partner and financial advisor and later executor of MacDonald's estate - He breached his fiduciary duty to MacDonald and the estate and prepared an inaccurate accounting of his transactions - The Manitoba Court of Queen's Bench discussed the factors con­sidered in fixing the appropriate amount of punitive damages - The court awarded the estate $500,000 punitive damages - See paragraphs 402 to 410.

Damages - Topic 1297

Exemplary or punitive damages - When awarded - The Manitoba Court of Queen's Bench discussed the basis for awarding punitive damages - See paragraphs 379 to 397.

Damages - Topic 1309

Exemplary or punitive damages - Breach of trust - Martin was MacDonald's lawyer, business partner and financial advisor and later executor of MacDonald's estate - He breached his fiduciary duty to MacDonald and the estate and presented an inaccurate accounting of transactions - The Manitoba Court of Queen's Bench held that the estate was entitled to punitive damages - See paragraphs 357 to 397.

Equity - Topic 3608

Fiduciary or confidential relationships - Standard of conduct - [See Partnership - Topic 5161 ].

Equity - Topic 3654

Fiduciary or confidential relationships - Breach of fiduciary relationship - Reme­dies - [See Equity - Topic 3655 ].

Equity - Topic 3655

Fiduciary or confidential relationships - Breach of fiduciary relationship - Dam­ages - Martin was MacDonald's lawyer, business partner and financial advisor and later executor of MacDonald's estate - He breached his fiduciary duty to MacDonald and the estate and presented an inaccurate accounting of transactions - The Manitoba Court of Queen's Bench held that the estate was entitled to have the accounts adjusted in the estate's favour and was also entitled to punitive damages - The court discussed the factors to be considered in determining the appropriate amount of punitive damages - The court awarded the estate $500,000 punitive damages - See paragraphs 357 to 410.

Equity - Topic 3714

Fiduciary or confidential relationships - Commercial relationships - Duty of dis­closure - [See Partnership - Topic 5163 ].

Partnership - Topic 5041

Relations between partners - Right to accounting - General - Martin was Mac­Donald's solicitor and business partner and later the executor of his estate - Martin's various transactions benefitted Martin at MacDonald's or MacDonald's estate's expense - The accounting Martin prepared for the administrator of the estate was inaccurate - The Manitoba Court of Queen's Bench stated that the estate was entitled to have the transactions recast and the accounts adjusted in the estate's favour - See paragraphs 202 to 210.

Partnership - Topic 5161

Relations between partners - Fiduciary duties - General - The Manitoba Court of Queen's Bench discussed the fiduciary duties owed by partners, lawyers and trustees - See paragraphs 411 to 458.

Partnership - Topic 5163

Relations between partners - Fiduciary duties - Duty of disclosure - Martin was MacDonald's solicitor and business partner - Martin arranged various transactions which resulted in benefit to Martin at MacDonald's expense and his estate's expense - Martin withheld information about the transactions from MacDonald and failed to advise him to seek indepen­dent legal advice - Martin presented an inaccurate accounting of the transactions - The Manitoba Court of Queen's Bench held that Martin breached his fiduciary duty to MacDonald both as his lawyer and partner - The court held that the false accounting should be remedied in the estate's favour - See paragraphs 147 to 195, 411 to 458.

Cases Noticed:

Korz v. St. Pierre et al. (1987), 23 O.A.C. 226; 61 O.R.(2d) 609 (C.A.), refd to. [para. 159].

McMaster v. Byrne, [1952] 3 D.L.R. 337 (P.C.), refd to. [para. 165].

Allison v. Clayhills (1907), 97 L.T. 709, refd to. [para. 165].

Commerce Capital Trust Co. v. Berk et al. (1989), 33 O.A.C. 373; 68 O.R.(2d) 257 (C.A.), refd to. [para. 167].

Davey v. Woolley, Hames, Dale & Ding­wall (1982), 35 O.R.(2d) 599 (C.A.), refd to. [para. 169].

Standard Investments Ltd. et al. v. Cana­dian Imperial Bank of Commerce (1983), 5 D.L.R.(4th) 452 (H.C.), revd. 11 O.A.C. 318; 52 O.R.(2d) 473 (C.A.), refd to. [para. 173].

Glaeser v. Klemmer (1914), 26 O.W.R. 787 (H.C.), refd to. [para. 176].

Maize v. McFarlane (1919), 16 O.W.N. 349 (H.C.), refd to. [para. 178].

Cameron v. Willis (1908), 9 W.L.R. 224 (Alta. T.D.), refd to. [para. 178].

Brown v. Premier Trust Co., [1947] O.R. 50 (H.C.), refd to. [para. 181].

Milligan v. Gemini Mercury Sales Ltd. (1977), 1 B.L.R. 63 (Ont. H.C.), refd to. [para. 184].

London Loan and Savings Co. v. Bricken­den, [1933] S.C.R. 257, refd to. [para. 184].

Vorvis v. Insurance Corp. of British Co­lumbia, [1989] 1 S.C.R. 1085; 94 N.R. 321; 58 D.L.R.(4th) 193, refd to. [para. 380].

Paragon Properties Ltd. v. Magna Invest­ments Ltd. (1972), 24 D.L.R.(3d) 156 (Alta. C.A.), refd to. [para. 384].

Smith v. Lasko et al. (1987), 47 Man.R.(2d) 199 (C.A.), refd to. [para. 388, Appendix B].

Addis v. Gramophone Co., [1909] A.C. 488 (H.L.), refd to. [para. 390].

Lake Manitoba Estates Ltd. v. Communi­ties Economic Development Fund (1989), 61 Man.R.(2d) 173 (Q.B.), refd to. [para. 391].

Weiss (H.L.) Forwarding Ltd. v. Omnus et al., [1976] 1 S.C.R. 776; 5 N.R. 511, refd to. [para. 399].

Canadian Aero Service Ltd. v. O'Malley, [1974] S.C.R. 592, refd to. [para. 412].

Regal (Hastings) Ltd. v. Gulliver, [1942] 1 All E.R. 378; [1967] 2 A.C. 134 (H.L.), refd to. [paras. 419, 429].

Keech v. Sanford (1726), Sel. Cas. Ch. 61, refd to. [para. 422].

Boardman v. Phipps, [1967] 2 A.C. 46 (H.L.), refd to. [para. 425].

Guerin v. Canada, [1984] 2 S.C.R. 335; 55 N.R. 161; 13 D.L.R.(4th) 321, refd to. [para. 431].

Frame v. Smith and Smith (1987), 78 N.R. 40; 23 O.A.C. 84; 42 D.L.R.(4th) 81 (S.C.C.), refd to. [para. 431].

International Corona Resources Ltd. v. LAC Minerals Ltd., [1989] 2 S.C.R. 574; 101 N.R. 239; 36 O.A.C. 57; 61 D.L.R.(4th) 14, refd to. [para. 431].

Norberg v. Wynrib, [1992] 2 S.C.R. 226; 138 N.R. 81; 9 B.C.A.C. 1; 19 W.A.C. 1, refd to. [para. 431].

Mida (G.) Construction Ltd. v. Imperial Developments (International) Ltd., [1978] 5 W.W.R. 577 (Man. C.A.), refd to. [Appendix B].

Lavigne v. Robern (1984), 6 O.A.C. 304; 51 O.R.(2d) 60 (C.A.), refd to. [Appen­dix B].

Lockhart v. MacDonald (1980), 44 N.S.R.(2d) 261; 83 A.P.R. 261; 118 D.L.R.(3d) 397 (C.A.), refd to. [Appen­dix B].

MacMillan Bloedel Ltd. v. Binstead (1983), 22 B.L.R. 255 (B.C.S.C.), refd to. [Appendix B].

Becker v. Pettkus, [1980] 2 S.C.R. 834; 34 N.R. 384; 117 D.L.R.(3d) 257, refd to. [Appendix B].

Helmore v. Smith (No. 1) (1887), 35 Ch. D. 436 (C.A.), refd to. [Appendix B].

Young v. Berryman (1881), Tru. 110 (N.B.S.C.), refd to. [Appendix B].

Morice v. Hubbard (1909), 10 W.L.R. 703 (Man. C.A.), refd to. [Appendix B].

Crighton v. Roman; Toronto General Trust Co. v. Roman, [1960] S.C.R. 858, refd to. [Appendix B].

Malicki v. Yankovich (1981), 33 O.R.(2d) 537 (H.C.), affd. (1983), 41 O.R.(2d) 160 (C.A.), refd to. [Appendix B].

Syncrude Canada Ltd. et al. v. Hunter Engineering Co. and Allis-Chalmers Canada Ltd. et al., [1989] 1 S.C.R. 426; 92 N.R. 1, refd to. [Appendix B].

Nelson v. Larholt, [1947] 2 All E.R. 751, refd to. [Appendix B].

Ribeiro v. Canadian Imperial Bank of Commerce (1989), 67 O.R.(2d) 385 (H.C.), refd to. [Appendix B].

Rookes v. Barnard, [1964] A.C. 1129 (H.L.), refd to. [Appendix B].

Cox (G.E.) Ltd. v. Adams (1979), 26 N.B.R.(2d) 49; 55 A.P.R. 49, 26 N.B.R.(2d) 628; 55 A.P.R. 628 (C.A.), refd to. [Appendix B].

Guay v. La Societé Franco-Manitobaine (1985), 37 Man.R.(2d) 16 (Q.B.), refd to. [Appendix B].

Schauenburg Industries Ltd. v. Borowski (1979), 101 D.L.R.(3d) 701 (Ont. H.C.), refd to. [Appendix B].

Johnston Terminals and Storage Ltd. v. Miscellaneous Workers', Wholesale & Retail Delivery Drivers' & Helpers', Local 351, [1976] 1 W.W.R. 341 (B.C.S.C.), refd to. [Appendix B].

Canson Enterprises Ltd. v. Boughton & Co. et al., [1991] 3 S.C.R. 534; 131 N.R. 321; 6 B.C.A.C. 1; 13 W.A.C. 1; 85 D.L.R.(4th) 129, refd to. [Appendix B].

Varcoe v. Sterling (1992), 7 O.R.(3d) 204 (Gen. Div.), affd. 10 O.R.(3d) 574 (C.A.), refd to. [Appendix B].

Taylor v. Wallbridge (1879), 2 S.C.R. 616, refd to. [Appendix B].

Girardet v. Crease & Co. (1987), 11 B.C.L.R.(2d) 361 (S.C.), refd to. [Ap­pen­dix B].

Haslam and Hier-Evans, Re, [1902] 1 Ch. 765 (C.A.), refd to. [Appendix B].

Blown v. Johnstone, [1988] 2 W.W.R. 178 (B.C.C.A.), refd to. [Appendix B].

Sutton v. Forst (1924), 55 O.L.R. 281 (C.A.), refd to. [Appendix B].

O'Sullivan v. Management Agency and Music Ltd., [1985] Q.B. 428 (C.A.), refd to. [Appendix B].

Lake Manitoba Estates Ltd. v. Communi­ties Economic Development Fund (1990), 66 Man.R.(2d) 58 (C.A.), refd to. [Appendix B].

Lake Manitoba Estates Ltd. v. Communi­ties Economic Development Fund (1991), 70 Man.R.(2d) 9 (C.A.), refd to. [Appendix B].

O'Sullivan v. Turk, [1947] 1 W.W.R. 673 (Man. K.B.), affd. [1947] 2 W.W.R. 672 (Man. C.A.), refd to. [Appendix B].

Silverman Jewellers (1974) Ltd. v. Traders General Insurance Co. (1977), 3 C.P.C. 129 (Man. Q.B.), refd to. [Appendix B].

Statutes Noticed:

Partnership Act, R.S.M. 1987, c. P-30; C.C.S.M., c. P-30, sect. 31 [para. 179].

Rules of Court (Man.), Queen's Bench Rules, rule 31.11(4) [Appendix B].

Authors and Works Noticed:

Flannigan, Robert, Fiduciary Obligation in the Supreme Court (1990), 54 Sask. L. Rev. 45, pp. 47 [para. 444]; 52 [para. 449]; 70 [para. 452].

Gautreau, J.R.M., Demystifying the Fiduciary Mystique (March 1989), 68 Can. Bar Rev. 1, generally [para. 438].

Halsbury's Laws of England (4th Ed.), vol. 44, pp. 89-91 [Appendix B].

Klinck, Dennis, Things of Confidence: Loyalty, Secrecy and Fiduciary Obliga­tion (1990), 54 Sask. L. Rev. 73, p. 92 [para. 455].

Massey, Calvin, American Fiduciary Duty in an Age of Narcissism (1990), 54 Sask. L. Rev. 101, generally [para. 443].

Restatement of the Law of Contracts (2nd Ed. 1986), s. 355 [para. 381].

Waddams, The Law of Damages (2nd Ed. 1991), p. 11-9 [para. 359].

Counsel:

J.F. Howard, Q.C., P. Schabas and M.A. Thomson, for the plaintiff;

R.A. Dewar, Q.C., and R.A. Watchman, for W.S.A. Martin;

R.B. McNicol, Q.C., for Rossmere Hold­ings (1970) Ltd.

This case was heard before Schwartz, J., of the Manitoba Court of Queen's Bench, Win­nipeg Centre, who delivered the following judgment on August 20, 1993.