Sherman v. Orenstein & Partners et al., (2005) 205 O.A.C. 75 (CA)

• Judge: Laskin, Cronk and Gillese, JJ.A.
• Court: Court of Appeal (Ontario)
• Case Date: April 01, 2005
• Jurisdiction: Ontario
• Citations: (2005), 205 O.A.C. 75 (CA)

Sherman v. Orenstein & Partners (2005), 205 O.A.C. 75 (CA)

MLB headnote and full text

Temp. Cite: [2005] O.A.C. TBEd. DE.041

Dr. Bernard Sherman (appellant) v. Orenstein & Partners, Peter Browning and Albert Title (respondents)

(C40739)

Indexed As: Sherman v. Orenstein & Partners et al.

Ontario Court of Appeal

Laskin, Cronk and Gillese, JJ.A.

December 2, 2005.

Summary:

The plaintiff sued a chartered accounting firm, claiming that the firm breached the standard of care required of it in performing a review engagement, by failing to include a "going concern" note in the financial statements of two limited partnerships in which the plaintiff invested which turned out to be shams.

The Ontario Superior Court, in a decision reported [2003] O.T.C. 787, dismissed the action, holding that the accounting firm did not breach the standard of care required for a review engagement and even if the firm had included a "going concern" note, the plaintiff would either not have noticed it, or if he did, would not have stopped making investment payments. The plaintiff appealed.

The Ontario Court of Appeal dismissed the appeal.

Professional Occupations - Topic 1464

Accountants - Negligence - Standard of care - The plaintiff sued a chartered accounting firm, claiming that the firm breached the standard of care required of it in performing a review engagement, by failing to include a "going concern" note in the financial statements of two limited partnerships in which the plaintiff invested which turned out to be shams - The plaintiff claimed that a "going concern" note would have alerted him that the limited partnerships would not likely become operating businesses and he would have stopped making investment payments much sooner than he did - The trial judge dismissed the action, holding that the accounting firm did not breach the standard of care required for a review engagement and even if the firm had included a "going concern" note, the plaintiff would either not have noticed it, or if he did, would not have stopped making investment payments - The plaintiff appealed - The Ontario Court of Appeal dismissed the appeal - The court discussed the standard of care required for a review engagement - Here the trial judge applied the correct standard of care for a review engagement and made no palpable or overriding error in his findings on negligence - See paragraphs 1 to 79.

Professional Occupations - Topic 1473

Accountants - Negligence - Reviews (non-audit) - [See Professional Occupations - Topic 1464 ].

Torts - Topic 49

Negligence - Standard of care - Particular persons and relationships - Accountants - [See Professional Occupations - Topic 1464 ].

Cases Noticed:

Bloor Italian Gifts Ltd. et al. v. Dixon et al. (2000), 133 O.A.C. 338; 48 O.R.(3d) 760 (C.A.), refd to. [para. 32].

Authors and Works Noticed:

Canadian Institute of Chartered Accountants' Handbook (1989), generally [paras. 33, 34].

Counsel:

Donald H. Jack and Jasmine Akbarali, for the appellant;

Nina Perfetto and Toshi Takishita, for the respondent.

This appeal was heard on April 1, 2005, by Laskin, Cronk and Gillese, JJ.A., of the Ontario Court of Appeal. The following decision of the court was delivered by Laskin, J.A., on December 2, 2005.