Melanson v. Cochrane, Sargeant, Nicholson & Paterson, (1985) 63 N.B.R.(2d) 91 (TD)

• Judge: Daigle, J.
• Case Date: April 25, 1985
• Jurisdiction: New Brunswick
• Citations: (1985), 63 N.B.R.(2d) 91 (TD)

Melanson v. Cochrane, Sargeant (1985), 63 N.B.R.(2d) 91 (TD);

    63 R.N.-B.(2e) 91; 164 A.P.R. 91

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[French language version follows English language version]

[La version française vient à la suite de la version anglaise]

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Melanson and Melanson v. Cochrane, Sargeant, Nicholson & Paterson

(M/1636/C/79)

Indexed As: Melanson v. Cochrane, Sargeant, Nicholson & Paterson

Répertorié: Melanson v. Cochrane, Sargeant, Nicholson & Paterson

New Brunswick Court of Queen's Bench,

Trial Division

Judicial District of Moncton

Daigle, J.

April 25, 1985.

Summary:

Résumé:

Two clients selling their business retained a law firm to draft two mortgages. The mortgages were void and unenforceable as being contrary to s. 37 of the Companies Act. The clients retained another law firm to commence an action against the first law firm for breach of duty and negligence. Nine months after retaining the firm, and before an action was later commenced, the limitation period expired. The clients commenced a negligence action for damages against the second law firm.

The New Brunswick Court of Queen's Bench, Trial Division, allowed the action. The court held that the second law firm was negligent in missing the limitation period. The court held that the clients were only entitled to $500.00 nominal damages, because although the first law firm was negligent in drafting the mortgages, there was no chance of the clients recovering under the mortgages even if they were valid.

Barristers and Solicitors - Topic 2502

Negligence - Basis of liability - The New Brunswick Court of Queen's Bench, Trial Division, stated that it was now well settled that there was concurrent liability in both tort and contract for lawyers, because they fell within that class of persons who profess special skill and knowledge - See paragraph 25.

Barristers and Solicitors - Topic 2584

Negligence - Particular negligent acts - Recommencement of action - The defendant lawyer failed to commence a contract action against another lawyer within the limitation period - The action would have been commenced in time had there been concurrent liability in contract and tort for lawyers - At that time the issue was unsettled - The defendant lawyer submitted that he formed an honest opinion that a tort action was available and that therefore the limitation period had not expired - The New Brunswick Court of Queen's Bench, Trial Division, held that the defendant lawyer was negligent, notwithstanding the uncertainty in the law - The court held that if the defendant lawyer was uncertain, he should have advised his clients as such and obtained clear instructions from them on the course of action to follow - See paragraphs 19 to 29.

Barristers and Solicitors - Topic 2592

Negligence - Particular negligent acts - Preparation of documents - A lawyer prepared two mortgages for a client - The mortgages were void and unenforceable as being contrary to s. 37 of the Companies Act - The New Brunswick Court of Queen's Bench, Trial Division, opined that the lawyer was negligent in failing to prepare an enforceable mortgage - See paragraphs 30 to 35.

Barristers and Solicitors - Topic 2663

Negligence - Damages - Measure of - A lawyer was negligent in failing to commence an action within the limitation period - Although the action would have been successful, there was no chance of recovering on the judgment - The New Brunswick Court of Queen's Bench, Trial Division, awarded the client only $500.00 nominal damages, because damages were limited to the actual loss suffered and where there could be no recovery on the judgment there was no loss to compensate the client for - See paragraphs 36 to 54.

Cases Noticed:

N.B. Tel v. John Maryon International Ltd. (1982), 43 N.B.R.(2d) 469; 113 A.P.R. 469, appld. [para. 20].

Doiron v. La Caisse Populaire d'Inkerman Ltee (1985), 61 N.B.R.(2d) 123; 158 A.P.R. 123, refd to. [para. 20].

Central Trust Co. v. Rafuse (1983), 57 N.S.R.(2d) 125; 120 A.P.R. 125; 147 D.L.R.(3d) 260, refd to. [para. 20].

Banks v. Reed (1974), 53 D.L.R.(3d) 27, refd to. [para. 22].

Howse v. Shaw (1913), 9 D.L.R. 642 (Ont. S.C.), refd to. [para. 24].

Melanson v. Leger, Creaghan and Savoie (1978), 24 N.B.R.(2d) 632; 48 A.P.R. 632, refd to. [para. 25].

Schwebel v. Telekes (1967), 61 D.L.R. (2d) 470, refd to. [para. 29].

Dom. Chain Co. v. Eastern Const. Co. (1976), 68 D.L.R.(3d) 385, refd to. [para. 29].

Groom v. Crocker, [1938] 2 All E.R. 394, refd to. [para. 29].

Esso Petroleum Co. v. Mardon, [1976] 2 All E.R. 5, refd to. [para. 29].

Fyk v. Millar (1973), 41 D.L.R.(3d) 684, refd to. [para. 30].

Gaiczenko v. Harris (1975), 1 C.C.L.T. 37, refd to. [para. 30].

Central and Eastern Trust Company v. Irving Oil et al., [1980] 2 S.C.R. 29; 31 N.R. 593; 39 N.S.R.(2d) 541; 71 A.P.R. 541, refd to. [para. 32].

Kitchen v. R.A.F. Association et al., [1958] 2 All E.R. 241, refd to. [para. 41].

Page v. Barrister (1971), 3 N.B.R.(2d) 773, refd to. [para. 42].

Whittingham v. Crease & Company (1978), 6 C.C.L.T. 1, refd to. [para. 44].

Wilson et al. v. Rowswell, [1970] 1 S.C.R. 865, refd to. [para. 45].

Messineo et al. v. Beale (1978), 86 D.L.R.(3d) 713, refd to. [para. 45].

Kienzle v. Stringer (1981), 130 D.L.R.(3d) 272, refd to. [para. 45].

Baxter v. F.W. Grappe & Co. Ltd., [1939] 2 All E.R. 752, refd to. [para. 45].

Lowenburg, Harris & Co. v. Wolley (1895), 25 S.C.R. 51, refd to. [para. 45].

Jacobson Ford-Mercury Sales Ltd. v. Sivertz (1979), 10 C.C.L.T. 274, refd to. [para. 45].

Authors and Works Noticed:

Cordery's Law Relating to Solicitors (6th Ed. 1968), p. 189 [para. 23].

Irvine, J., Contract and Tort: Troubles along the Border, 10 C.C.L.T. 281, pp. 281-305 [para. 26].

Klar, L.N., Annotation to Messineo v. Beale, 5 C.C.L.T. 235, pp. 235-237 [para. 26].

Halsbury's Laws of England (3rd Ed.), vol. 11, pp. 233, 236 [para 40]; vol. 36, p. 99, para. 135 [para. 41].

Counsel:

Scott F. Fowler, for the plaintiffs;

David Russel and Douglas Evans, for the defendants.

This action was heard on September 10 and 11, 1984, before Daigle, J., of the New Brunswick Court of Queen's Bench, Trial Division, Judicial District of Moncton, who delivered the following judgment on April 25, 1985: