2013 ONSC 980, 2013 ONSC 980

Vincent v. Blake Cassels & Graydon LLP et al. [Indexed as: Vincent v. Blake Cassels & Graydon LLP] Ontario Reports Ontario Superior Court of Justice, Stevenson J. February 12, 2013 114 O.R. (3d) 100 | 2013 ONSC 980 Case

Summary Professions — Barristers and solicitors — Duty of care — Plaintiff suing lawyers who prepared his mother's wills and estate freeze for negligence and breach of fiduciary duty on basis that they failed to give effect to mother's instructions to treat plaintiff and his sister equally — Lawyers moving for

summary judgment dismissing action on basis that they clearly owed no duty of care to plaintiff as beneficiary under will — Motion dismissed — Genuine issue that required trial existing with respect to whether lawyers owed duty of care to plaintiff in circumstances of this case as it was not clear whether plaintiff's interests were in direct conflict with his mother's or whether they were in fact aligned and identical. [page101] The plaintiff sued the defendant lawyers and others for negligence and breach of fiduciary duty.

He claimed that the lawyers, in preparing his mother O's two wills and an estate freeze, failed to give effect to her instructions to treat the plaintiff and his sister J equally. The lawyers brought a motion for

summary judgment dismissing the action on the basis that it was clear in law that they owned no duty of care to the plaintiff as a beneficiary under their client's wills. Held, the motion should be dismissed. There was a genuine issue requiring a trial as to whether the lawyers owed the plaintiff a duty of care as a beneficiary under the wills. In situations where solicitors would be placed in direct conflict with their duty owed to a testator client, a beneficiary cannot assert a claim against the testator's solicitor.

However, it was not clear on the facts of this case whether O's interests were in direct conflict with the plaintiff's or whether they were, in fact, aligned and identical. J did not appear to dispute that O's intention was to treat her children equally. There also appeared to be issues concerning whether O understood the value of the shares used in the state freeze and the wills, whether she had any medical concerns, including cognitive issues, and whether there was a conflict of interest, given the lawyers' ongoing solicitor-client relationship with J. Those issues could not be resolved without a trial.

Finally, the settlement of the plaintiff's dispute with J in another action in which he challenged the wills and the estate freeze did not raise any estoppel issues in this action, as the minutes of settlement specifically stated that the settlement was without prejudice to the plaintiff's ability to continue his action against the lawyers, who were not parties to the settled action. Cases referred to Graham v. Bonnycastle, [2004] A.J. No. 940 , 2004 ABCA 270 , 243 D.L.R. (4th) 617 , [2005] 4 W.W.R. 205 , 36 Alta.

L.R. (4th) 203 , 354 A.R. 266 , 50 C.P.C. (5th) 233 , 10 E.T.R. (3d) 167 , 133 A.C.W.S. (3d) 717 , consd Other cases referred to Barbulov v. Huston, [2010] O.J. No. 2251 , 2010 ONSC 3088 , 57 E.T.R. (3d) 134 , 319 D.L.R. (4th) 543 , 75 C.C.L.T. (3d) 285 (S.C.J.) ; Combined Air Mechanical Services Inc. v. Flesch (2011), 108 O.R. (3d) 1 , [2011] O.J. No. 5431 , 2011 ONCA 764 , 286 O.A.C. 3 , 97 C.C.E.L. (3d) 25 , 14 C.P.C. (7th) 242 , 13 R.P.R. (5th) 167 , 211 A.C.W.S. (3d) 845 , 93 B.L.R. (4th) 1 , 10 C.L.R. (4th) 17 ; Ernst v. National Trust Co., [2003] O.J. No. 4181 (S.C.J.) [Leave to appeal refused [2004] O.J.

No. 426 , 128 A.C.W.S. (3d) 428 (S.C.J.) ]; Harrison v. Fallis, [2006] O.J. No. 2336 , 149 A.C.W.S. (3d) 49 (S.C.J.) ; Korpiel v. Sanguinetti, [1999] B.C.J. No. 1048 , 26 E.T.R. (2d) 147 , 88 A.C.W.S. (3d) 279 (S.C.) ; Reference re Broome v. Prince Edward Island, [2010] 1 S.C.R. 360 , [2010] S.C.J. No. 11 , 2010 SCC 11 , 297 Nfld. & P.E.I.R. 24 , EYB 2010-171689 , 2010EXP-1218 , J.E. 2010-663 , 400 N.R. 148 , 317 D.L.R. (4th) 218 , 186 A.C.W.S. (3d)

870 , 73 C.C.L.T. (3d) 1 ; White v. Jones, [1993] 3 All E.R. 481 , [1993] 3 W.L.R. 730 (C.A.) Rules and regulations referred to Rules of Civil Procedure, R.R.O. 1990, Reg. 194 , rules 20, 20.01(3) , 20.04(2.1) , 20.04(4) MOTION for

summary judgment dismissing an action. Richard B. Swan and Ranjan K. Agarwal, for plaintiff/ responding party. [page102] Kathryn Podrebarac and Timothy M. Morgan, for defendants/ moving parties. Endorsement of STEVENSON J. : — Introduction [ 1 ] The plaintiff, John David Vincent ("David"), is the son of Orlie Vincent ("Orlie"), who passed away on April 8, 2005 at age 77.

Orlie's other child is Janice Vincent ("Janice"). [ 2 ] On February 3, 2005, Orlie signed two wills (the "Wills") and an estate freeze of the shares of 1531750 Ontario Limited ("1531750") held by Orlie's company, the Vincent Group (the "estate freeze"). [ 3 ] David commenced a notice of action, issued April 12, 2007, and subsequently a statement of claim, dated May 11, 2007, against the defendants Blake Cassels & Graydon LLP ("Blakes"), Susan E.

Slattery, Jillian Swartz, solicitors and partners of Blakes (collectively referred to as the "Blakes defendants"), Klasner & Solomon (A Partnership), a partnership providing financial and accounting services and Eric D. Solomon, a chartered accountant and partner at Klasner & Solomon (collectively referred to as the "Klasner firm").

David seeks against the defendants: damages of $5 million for negligence and breach of fiduciary duty; special damages of $1 million in respect of fees, expenses and other disbursements associated with Action No. 01-2013/05 and with this action; prejudgment and post-judgment interest, and costs of this proceeding and Action No. 01-2013/05, all with respect to the preparation of the Wills and the estate freeze of Orlie. [ 4 ] David alleges that Orlie lacked testamentary capacity and that the preparation of her Wills and estate freeze were the product of undue influence by Janice as the estate freeze was effected in order to confer a benefit on Janice.

David submits that Orlie's intention was to treat both David and Janice equally and that Orlie's Wills do not reflect the same. He contends that the Blakes defendants failed to design and implement wills and an estate freeze that fulfilled Orlie's intention to treat David and Janice equally. Additionally, David submits that the defendants failed to recommend and obtain a proper valuation of the Vincent Group's interest in 1531750 and acted in a conflict of interest, given their role as counsel to Janice and her company. [ 5 ] The Blakes defendants bring this motion for

summary judgment to dismiss the action brought by David as they contend that David's claim cannot succeed at law. Their principal argument is that the Blakes defendants, as the testator Orlie's [page103] lawyers, owed no duty to David as a beneficiary as to impose such a duty would place solicitors in an impossible conflict. [ 6 ] David opposes the motion as he submits that there are genuine issues requiring a trial, and there are too many facts and issues in dispute which require a determination at trial with the benefit of a full, oral evidentiary record. Further, David asserts that there is no benefit to granting

summary judgment now as the pleadings are closed, examinations for discovery are complete and the only remaining step is a trial. He submits that the Blakes defendants have waited over five years to bring this motion when the facts and the law relied upon by them ought to have been known to them for several years and, in any event, do not support their position. [ 7 ] The Klasner firm has not moved for

summary judgment. Facts Prior to the estate freeze [ 8 ] Orlie's husband, Boles John Vincent ("Bob"), passed away in June of 2004. Orlie and Bob each owned 50 per cent of the shares in the Vincent Group, an investment holding company. At the time of Bob's death, Orlie inherited Bob's shares in the Vincent Group and she became its sole shareholder. [ 9 ] One of the assets held by the Vincent Group was 50 per cent of the common shares in 1531750, and Janice was the other 50 per cent shareholder. 1531750, through intermediary companies, owned 50 per cent of the shares in Fundata Canada Ltd. ("Fundata").

Therefore, prior to the estate freeze, the Vincent Group had an indirect 25 per cent interest in Fundata. [ 10 ] Prior to 2002, Janice and her ex-husband each owned 25 per cent of the shares of Fundata through intermediary companies and the remaining 50 per cent of the shares were owned by HCPH Canadian Newspaper Holdings Co. In 2002, the Vincent Group loaned Janice funds in order for her to purchase her ex-husband's 25 per cent interest in Fundata. The amount of the loan was $2.5 million and, in 2003, this loan was converted into a 50 per cent common shareholding interest in 1531750.

The estate freeze [ 11 ] On February 3, 2005, Orlie entered into the estate freeze that converted the Vincent Group's common shares in 1531750 into 10,000 preference shares and fixed the total redemption value of those shares at $2.5 million. The valuation of the shares was provided by one of the defendants, Eric Solomon. [page104] The Wills [ 12 ] On the same day that Orlie signed documents effecting the estate freeze, Orlie signed the Wills.

Orlie had made prior wills in 2000 which left her estate to her husband and, if her husband had predeceased her, equally to David and Janice. [ 13 ] In the Wills, certain legacies were made to Orlie's grandchildren that were not made in the prior wills from 2000.

Additionally, as Orlie's husband had predeceased her, the residue of Orlie's estate was divided equally between David and Janice. [ 14 ] Also under the terms of the Wills, the preference shares of 1531750 owned by the Vincent Group were transferred to Janice and Janice's one-half share in the residue of the estate was reduced by the value of these shares, which was fixed at $2.5 million by virtue of the estate freeze. The Issues [ 15 ] The issues are as follows: (

i) is there a genuine issue requiring a trial as to whether the Blakes defendants owed David a duty of care as a beneficiary under the wills; (ii) is there a genuine issue requiring a trial as to whether David is entitled to recover the costs incurred in the estates action from the Blakes defendants; and (iii) is there a genuine issue requiring a trial in respect of whether the Klasner defendants can maintain their cross-claim for contribution and indemnity against the Blakes defendants? Relevant Statutory Provisions [ 16 ] Rule 20 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 governs motions for

summary judgment. Rule 20.01(3) prescribes when a defendant may bring a motion for

summary judgment: 20.01(3) A defendant may, after delivering a statement of defence, move with supporting affidavit material or other evidence for

summary judgment dismissing all or part of the claim in the statement of claim. [ 17 ] Rule 20.04(4) provides: 20.04(4) Where the court is satisfied that the only genuine issue is a question of law, the court may determine the question and grant judgment accordingly, but where the motion is made to a master, it shall be adjourned to be heard by a judge. [page105] [ 18 ] Rule 20.04(2.1) prescribes the court's powers on a motion for

summary judgment: 20.04(2.1) In determining under clause (2)(

a) whether there is a genuine issue requiring a trial, the court shall consider the evidence submitted by the parties and, if the determination is being made by a judge, the judge may exercise any of the following powers for the purpose, unless it is in the interest of justice for such powers to be exercised only at trial: 1. Weighing the evidence. 2. Evaluating the credibility of a deponent. 3. Drawing any reasonable inference from the evidence. The Law on

Summary Judgment [ 19 ] In the Ontario Court of Appeal decision of Combined Air Mechanical Services Inc. v. Flesch (2011), 108 O.R. (3d) 1 , [2011] O.J. No. 5431 , 2011 ONCA 764 , the

summary judgment rule was clarified. At paras. 37 and 38, the court explained the purpose of the amended Rule 20: [T]he amended rule permits the motion judge to decide the action where he or she is satisfied that by exercising the powers that are now available on a motion for

summary judgment, there is no factual or legal issue raised by the parties that requires a trial for its fair and just resolution. However, we emphasize that the purpose of the new rule is to eliminate unnecessary trials, not to eliminate all trials. The guiding consideration is whether the

summary judgment process, in the circumstances of a given case, will provide an appropriate means for effecting a fair and just resolution of the dispute before the court. (Footnote omitted; emphasis in original)

[ 20 ] At paras. 41 to 44 of the Combined Air decision, the court stated that there are three types of cases amenable to

summary judgment: (1) where parties agree that it is appropriate to determine an action by way of a motion for

summary judgment; (2) those claims or defences that are shown to be without merit; and (3) the disposition of cases on the merits where the trial process is not required in the "interest of justice". [ 21 ] In a

summary judgment motion, the court must apply the "full appreciation test" as set out in Combined Air, at para. 50: In deciding if these powers should be used to weed out a claim as having no chance of success or be used to resolve all or part of an action, the motion judge must ask the following question: can the full appreciation of the evidence and issues that is required to make dispositive findings be achieved by way of

summary judgment, or can this full appreciation only be achieved by way of a trial? [ 22 ] At paras. 54 to 55, the court went on to further explain the meaning of "full appreciation of the evidence and issues": [page106] The point we are making is that a motion judge is required to assess whether the attributes of the trial process are necessary to enable him or her to fully appreciate the evidence and the issues posed by the case.

In making this determination, the motion judge is to consider, for example, whether he or she can accurately weigh and draw inferences from the evidence without the benefit of the trial narrative, without the ability to hear the witnesses speak in their own words, and without the assistance of counsel as the judge examines the record in chambers.

Thus, in deciding whether to use the powers in rule 20.04(2.1) , the motion judge must consider if this is a case where meeting the full appreciation test requires an opportunity to hear and observe witnesses, to have the evidence presented by way of a trial narrative, and to experience the fact-finding process first-hand.

Unless full appreciation of the evidence and issues that is required to make dispositive findings is attainable on the motion record -- as may be supplemented by the presentation of oral evidence under rule 20.04(2.2) -- the judge cannot be "satisfied" that the issues are appropriately resolved on a motion for

summary judgment. (

i) Is there a genuine issue requiring a trial as to whether the Blakes defendants owed David a duty of care as a beneficiary under the Wills? David's claim [ 23 ] David contends that the Blakes defendants and the Klasner firm had served as Janice's professional advisers for a lengthy period of time while they had a more limited professional relationship with Orlie.

He further submits that Janice was a principal beneficiary under the estate freeze and Wills, and that the defendants should have recommended to Orlie that she obtain independent legal, financial or other professional advice and an independent valuation of the shares in issue. [ 24 ] David argues that Orlie had clearly communicated to the defendants that she was to treat her two children equally.

He submits that this is evidenced by a letter dated October 14, 2004 that was copied to Blakes, wherein Eric Solomon wrote to Orlie that "we further understand that you plan to divide your estate equally between your two children Janice and David".

David further contends that Orlie communicated this to the Blakes defendants at a meeting held on October 29, 2004 and in an e-mail to Blakes in November 2004. [ 25 ] It is David's position that as a proper valuation of the shares was never recommended or undertaken, the shares were not given fair market value, but rather they were given an artificially low value of $2.5 million. He contends that the value of the Vincent Group's shares of 1531750 was crucial to ensuring that David and Janice were treated equally under the terms of the will as intended by Orlie.

He points to the fact that in contrast to the $2.5 million valuation, Glacier Media Inc. purchased [page107] the other 50 per cent interest in Fundata later that same year for approximately $15 million. [ 26 ] David sought to challenge the estate freeze and the Wills in a separate action (the "estates action") in April 2005. On January 20, 2006, as per the judgment and order of Low J., David and Janice were both removed as executors of Orlie's estate and the issues concerning the validity of the estate freeze and the Wills were to proceed to trial.

David contends that during the course of documentary discovery in the estates action, he obtained productions which enabled him to obtain a draft valuation of 1531750. This draft valuation values the shares at approximately $12.75 million, meaning that the Vincent Group's 50 per cent interest was worth more than $6 million. [ 27 ] David and Janice were able to reach a settlement with respect to the estates action through mediation.

As per the terms of settlement, David and Janice agreed that the Vincent Group's 50 per cent interest in 1531750 was deemed to be $4 million and that the settlement was entirely without prejudice to David's claim against the defendants in this action. David contends that this handwritten settlement did not address the validity of the estate freeze and the Wills. [ 28 ] After David and Janice had agreed to the terms of settlement, two issues needed to be referred to arbitration.

Those issues were whether David and Janice should receive one-half of the value of the dividends declared on the estate's preference shares in 1531750 between the date of Orlie's death and the date of distribution; and whether Janice should be credited with an amount equivalent to the capital gains tax that may arise if she later sold her shares in 1531750 or her interest in Fundata. [ 29 ] Counsel indicated that there was an arbitration decision that was later partially overturned by the court but that matters were eventually resolved and the parties entered into minutes of settlement, dated January 29, 2010.

The minutes included a provision that the agreement was a compromise between David and Janice and they further agreed that the terms of the minutes were entirely without prejudice to David's claims made in this action.

The minutes further stipulated that the parties would execute full and final mutual releases and that they would release each other from any claim that ". . . they had, have or can, shall or may have against each other arising in respect of these proceedings and the estate, except in respect of the implementation and enforcement" of the terms of the Minutes, which was without prejudice to David's rights to [page108] pursue this action. Janet was also to obtain an order dismissing the estates action which was subsequently completed. The Blakes defendants' position

[30] The Blakes defendants contend that the facts are not in dispute and that the only issue is a question of law regarding whether theBlakes defendants owed David a duty of care. They submit that the action falls within the second category of cases which are amenableto

summary judgment as identified in Combined Air, as the claim is without merit because the law is clear that the Blakes defendantscannot owe a duty to David. They argue that this issue is properly determined on a

summary judgment motion as previous actions havebeen dismissed against lawyers for lack of the duty of care on

summary judgment motions and in motions to strike. They rely upon thedecisions of Barbulov v. Huston, [2010] O.J. No. 2251, 2010 ONSC 3088 (S.C.J.); Harrison v. Fallis, [2006] O.J. No. 2336, 149A.C.W.S. (3d) 49 (S.C.J.); Graham v. Bonnycastle, [2004] A.J. No. 940, 2004 ABCA 270; and Korpiel v. Sanguinetti, [1999] B.C.J. No.1048, 26 E.T.R. (2d) 147 (S.C.) in support of their position. [31] In determining whether a duty of care is owed to David by the Blakes defendants, the Blakes defendants rely on the decision ofReference re Broome v. Prince Edward Island, 2010 SCC 11 , [2010] 1 S.C.R. 360, [2010] S.C.J.

No. 11, at para. 12, whereinthe court stated that in determining whether a duty of care is owed, it must consider these two questions: (

i) Has the alleged duty of care been settled by existing authority? And, if not, (ii) should a new duty of care be established? [32] The Blakes defendants submit that the alleged duty of care has been settled by existing authority in that it has been determined thatlawyers do not owe to third party beneficiaries a duty of care in respect of testamentary capacity or undue influence. They contend thatonly in limited circumstances will the courts find that a lawyer owes a duty to a third party beneficiary in preparing a will. The Blakesdefendants rely on the decision of White v.

Jones, a 1993 English Court of Appeal decision, which they submit stands for the propositionthat duties to a beneficiary can only exist where the interest of the beneficiary and testator are "aligned and identical". As stated by LordSteyn [page109] in White v. Jones, [1993] 3 All E.R. 481, [1993] 3 W.L.R. 730 (C.A.), at p. 503 All E.R.: The possibility of a conflict between a testator and a proposed beneficiary was emphasized. It could arise.

The answer must be that asolicitor could never owe to an intended beneficiary a duty which is inconsistent with his duty to his client. [33] The Blakes defendants argue in their factum that the courts have found that "where lawyers have not prepared the will in due time orwhere an executed will fails due to a technical deficiency, (e.g., where a beneficiary is improperly a witness to the will's execution),beneficiaries under the will that failed may bring a claim against the testator's solicitors for negligence or breach of fiduciary duty".

Theysubmit that in all the cases, the interests of the testator and the beneficiary are identical as they both wanted the will to come intoexistence and to be given effect. The Blakes defendants argue that David is not making a similar claim in that he is alleging that Orlie didnot have the mental capacity to make the Wills or estate freeze; she was unduly influenced by Janice; the Blakes defendants did not giveeffect to Orlie's intention to treat David and Janice equally; and as the Blakes defendants represented Janice, they were in a conflict ofinterest.

They submit that David's interests are in conflict with Orlie's interests in that David wants the Wills to fail as he contends thatthe Wills and estate freeze never should have been in existence. [34] The Blakes defendants rely on a number of decisions in support of their position that the law is clear that a beneficiary cannot asserta claim against a testator's solicitor on the basis of lack of testamentary capacity or undue influence as the solicitor does not owe a duty tothe beneficiaries given this would place the solicitor in direct conflict with the duty owed to its client, the testator.

They contend that thetestator's interest is to have the will come into effect whereas the beneficiaries' interest is to have the will fail. These positions theysubmit are not aligned or identical. [35] In Graham v. Bonnycastle, a 2004 Alberta Court of Appeal decision relied on by the Blakes defendants, the disappointed beneficiaryunder a previous will challenged a new will.

The court upheld the dismissal of the action and explained, at paras. 29 to 30, why asolicitor's duty could not be extended to third party beneficiaries under a prior will: There are strong public policy reasons why the solicitors' duty should not be extended. The imposition of a duty to beneficiaries under aprevious will would create inevitable conflicts of interest. A solicitor cannot have a duty to follow the instructions of his client to preparea new will and, at [page110] the same time, have a duty to beneficiaries under previous wills whose interests are likely to be affected bythe new will.

The interests of a beneficiary under a previous will are inevitably in conflict with the interests of the testator who wishes tochange the will by revoking or reducing a bequest to that beneficiary[.] A solicitor must be free to act in the best interests of her client when discharging her duties to make inquiries regarding the client'stestamentary capacity without concerns about the interest of others. The decision as to testamentary capacity, which is a difficult one forthe solicitor, should not be made more difficult by the unnecessary extension of the duties to others.

Concerns about lawsuits brought bybeneficiaries under prior wills would create the danger that solicitors would decide against the testator's interest in determining capacity,where any doubt arose as to testamentary capacity and previous wills existed. Solicitors may be reluctant to act for elderly testators whowish to change provisions of their will, if they may also be liable for damages to beneficiaries under previous wills. [36] The Blakes defendants submit that Graham v.

Bonnycastle (leave to appeal was dismissed by the Supreme Court of Canada) wasfollowed by Eberhard J. of this court in the decision of Harrison v. Fallis as Eberhard J. also found that a solicitor did not owe a duty ofcare to third party beneficiaries under a prior will. [37] The Blakes defendants argue that David is in precisely the same situation as the plaintiffs in these decisions, as he is challenging thevalidity of the wills on the basis that his mother Orlie, lacked testamentary capacity and was subject to undue influence.

This, theycontend, is in conflict with Orlie's interests and would put the Blakes defendants in direct conflict with the duty that they owed to Orlie. [38] It is also the position of the Blakes defendants that David had the opportunity to challenge the new will on the basis that Orlie didnot have capacity or on the basis that she was unduly influenced by Janice. They point to the fact that David did challenge the validity ofthe will under separate estate proceedings. They contend that this is not unlike the decision of Korpiel v.

Sanguinetti where a claimbrought against the testator's solicitor was dismissed where the plaintiff had lost a challenge to the will previously. The Blakes

defendants also contend that David's situation is similar to that of Graham v. Bonnycastle , in that the parties settled the case which challenged the validity of the will and then the beneficiary proceeded against the solicitor.

The court held that it was the beneficiary's choice to settle and it then dismissed the action against the solicitor. [ 39 ] The Blakes defendants submit that David had the opportunity to challenge the will in the estates proceedings and if it had been found that Orlie lacked testamentary capacity or that the Wills were created as a result of undue influence by Janice, [page111] the Wills would have been given no effect and the prior wills from 2000 would govern. David and Janice would have received their inheritance under the prior wills and no damage caused by the solicitor.

If David's challenge had been unsuccessful, there would be no loss caused by the solicitor as the Wills would represent Orlie's true intentions. [ 40 ] It is also the position of the Blakes defendants that the system ensures that any issues regarding mental capacity are determined and should be determined prior to the distribution of the estate's assets. They contend that David and the other beneficiaries have already taken under the Wills after David's challenge to the validity of the Wills was dismissed with prejudice by court order.

They argue that David is seeking to obtain more than what was in the estate to begin with as he asserts that the Wills are invalid. [ 41 ] The Blakes defendants contend that David's argument, that he settled the estates action without prejudice to his claims against the defendants in this action, is irrelevant as David had the opportunity to challenge the validity of the Wills prior to distribution and he did so and settled the matter.

Their position is that David's action against the Blakes defendants is an abuse of process as David already had a remedy available in the estates action and availed himself of that remedy. They further contend that there is no lacuna and, as such, there is no basis to impose a duty on the Blakes defendants to David. [ 42 ] The Blakes defendants also argue that there was no duty owed to David to avoid a conflict of interest as David was never a client and they owed him no independent duty to avoid a conflict of interest.

David's only claim is as a beneficiary and they contend that the law is clear that solicitors do not owe him a duty of care. Disposition [ 43 ] For the following reasons, I find that there is a genuine issue requiring a trial as to whether the Blakes defendants owed David a duty of care and the motion for

summary judgment brought by the Blakes defendants is dismissed. Taking into consideration the evidence before me, Rule 20 and the test in Combined Air, I do not have a full appreciation of the evidence and issues that is required for me to make dispositive findings. [ 44 ] I cannot conclude at this stage, based on the evidence, that the Blakes defendants do not owe a duty of care to David and that David's claim is without merit.

I agree with counsel for David's submissions that the majority of the case law relied upon by the Blakes defendants involves cases where the plaintiff [page112] was a disappointed beneficiary under a prior will and he or she seeks to challenge the validity of a subsequent will. In those situations, the interests of the testator were clearly not aligned or identical to those of the beneficiaries. David is arguing that both the Blakes defendants and the Klasner firm failed to give effect to Orlie's intention to treat her two children equally.

As such, David's interests would not be in conflict with those of his mother Orlie, as they both wanted David and Janice to be treated equally. [ 45 ] David contends that this is not a situation where the Wills would fail and the estate then distributed in accordance with the terms of the prior wills from 2000. Rather, David argues that the Blakes defendants had instructions from Orlie to treat her children equally and they did not ensure that this happened and David is the only party to have suffered a loss by the Blakes defendants' failure to carry out Orlie's intentions to treat her children equally.

Counsel for David argues that this does not mean that the Wills fail at all. David contends that there was not a proper valuation obtained regarding the value of the shares and the Blakes defendants were in a conflict position having a pre-existing solicitor-client relationship with Janice.

David argues that if the Blakes defendants had followed Orlie's instructions properly and obtained a valuation of the shares at fair market value, they would have ensured that Orlie's children were treated equally rather than favouring Janice. [ 46 ] I acknowledge that in situations where solicitors would be placed in direct conflict with their duty owed to a testator client, a beneficiary cannot assert a claim against the testator's solicitor; however, it is not clear on the facts of this case whether Orlie's interests are in direct conflict with David's interests or whether they are in fact "aligned or identical".

This is clearly a triable issue as there needs to be a determination as to whether Orlie and David's interests are the same and whether what Orlie intended was what David and Janice received from the estate. [ 47 ] There are questions concerning whether the estate freeze and the Wills properly represented Orlie's intentions to treat her children equally. There does not seem to be any dispute by Janice that the intention of Orlie was to treat her children equally and I note that this fact was referred to in the arbitration decision of the Honourable Mr. Patrick LeSage as being agreed upon by both Janice and David.

Additionally, in correspondence to Orlie from Eric Solomon, notes from Ms. Slattery's file regarding her meeting with Orlie and Janice, and an e-mail [page113] from Orlie to the defendants, it is clear that Orlie's intention was to treat David and Janice equally. [ 48 ] The concurring decision of Berger J.A. in Graham v. Bonnycastle acknowledges that there may be other situations where a solicitor could owe a duty of care to a beneficiary, at para. 59 of that decision: The duty of a wills solicitor is to protect the testator from making devises of his estate other than those which he actually intends.

In fulfilling her duties to her client, the solicitor will only owe a duty to a former beneficiary where the solicitor has negligently excluded that beneficiary from his rightful bequest contrary to the testator's "true" intentions. By "true" intentions I am referring to the intentions of the testator at the moment he or she possessed the requisite testamentary capacity. When such a duty is imposed, it is difficult to imagine a situation where the duty owed to the testator's best interests is at odds with the duty owed to a former beneficiary who is rightfully owed a testamentary gift.

The duties are one and the same, for it is in the testator's best interests that all of his "true" testamentary wishes be carried out after his passing. [ 49 ] There also appear to be issues concerning whether Orlie understood the value of the shares used in the estate freeze and the Wills; whether she had any medical concerns, including cognitive issues; whether there was a conflict of interest, given the Blakes defendants'

ongoing solicitor-client relationship with Janice; whether the Blakes defendants should have recommended to Orlie that she obtain a proper valuation of the shares and the scope of the Blakes defendants' duties. These issues are all tied into the issue of whether the defendants failed to give effect to Orlie's intentions to treat her children equally. All of this will require detailed evidence from the Blakes defendants and the Klasner firm.

As such, I find that I cannot accurately weigh and draw inferences from the evidence without the benefit of the trial narrative and without the ability to hear and observe witnesses. [ 50 ] I agree with the assertion by David that there are many facts and issues in dispute, including the acts and conduct of the Blakes defendants, the alleged failure to obtain a valuation of the shares in 1531750 at the time of the estate freeze, the appropriate value of the shares, the alleged failure to implement Orlie's instructions to treat her two children equally, the conflict of interest alleged by David and the scope of the duties owed by the Blakes defendants to David.

I find that these issues involve questions of fact, mixed law and fact, and questions of law which should be fully canvassed at trial. [ 51 ] The Blakes defendants also rely on the fact that there was a court order dismissing the estates action "with prejudice" and that David is precluded from bringing this action on the basis of [page114] estoppel.

They argue that despite David's private settlement and agreement with Janice, David's opportunity to challenge the validity of the will, including claims of undue influence or capacity, should have been made in the estates action. [ 52 ] David contends that he settled with Janice as a result of the costly ongoing litigation and as a compromise to avoid the depletion of the estate. He submits that the Blakes defendants were not parties to the estates action and should not derive a benefit from the settlement of that action. David relies upon the decision of Ernst v. National Trust Co., [2003] O.J.

No. 4181 (S.C.J.) , a decision of Carnwath J., and the decision of O'Driscoll J. in Ernst v. National Trust Co., [2004] O.J. No. 426 , 128 A.C.W.S. (3d) 428 (S.C.J.) , where leave to appeal Carnwath J.'s decision was denied. In Ernst, a settlement was reached between the beneficiaries and one of the beneficiaries then brought an action against the defendant trust company. Carnwath J. found that the issues were not adjudicated in the estates action and the order did not deal with the validity of the will.

Additionally, he found that the trust company had played no role in the settlement and the will was never probated. As a result, he refused to strike the claim on the basis of res judicata, estoppel and abuse of process. [ 53 ] O'Driscoll J., in denying leave to appeal, also held that there was no issue of estoppel, res judicata or abuse of process, commenting that the parties, issues and claims were different.

Counsel for David argues that as in Ernst, the parties are different than in the estates action and there are different claims and issues brought forward by David in this action with respect to negligence and breach of fiduciary duty. [ 54 ] I cannot conclude that the settlement of David's dispute with Janice in the estate litigation raises any estoppel issue in this litigation.

The language of the minutes of settlement specifically states that the settlement is without prejudice to David's ability to continue his action against the Blakes defendants and the Klasner firm who were not parties to the estates action. The Wills were never probated and there was no adjudication with respect to the validity of the Wills or the estate freeze given the compromise reached by the parties. I also note that in the minutes of settlement, the parties acknowledged that the settlement "was a compromise strictly as between them" with neither "admitting or ceding liability . . .".

Additionally, the Blakes defendants played no role in the settlement. [ 55 ] The Blakes defendants rely, as indicated, on the decision of Graham v. Bonnycastle , where the parties settled the action where the validity of the will was challenged and the Court then [page115] dismissed the action against the solicitor, stating that it was the plaintiff's choice to settle the issue with respect to the challenge of the will. However, the terms of settlement in Graham v. Bonnycastle did not include a term allowing the beneficiaries to continue to pursue their claim against the professionals as in this case.

I also note that in the decisions relied upon by the Blakes defendants, there is no allegation of conflict of interest as David claims in this action. (ii) Is there a genuine issue requiring a trial as to whether David is entitled to recover the costs incurred in the estates action from the Blakes defendants? [ 56 ] The Blakes defendants submit that the costs incurred by beneficiaries in challenging the validity of the will are not properly recoverable from solicitors by the beneficiary.

They contend that any costs, if appropriate, are to be paid by the estate. [ 57 ] The Blakes defendants also argue that such damages are not recoverable by David because the Blakes defendants owed him no duty.

They further contend that in the estates action, other than the estate trustee and the Children's Lawyer, costs of the proceedings were to be borne by the parties and, as such, the issue of costs was dealt with in the estates action and David cannot relitigate this issue. [ 58 ] As the issue as to whether or not the Blakes defendants owed a duty of care to David is proceeding to trial and this could affect any costs issue regarding the estates action, I am not prepared to grant the relief requested in dismissing David's claim regarding this issue as it too must be determined at trial. (iii) Is there a genuine issue requiring a trial in respect of whether the Klasner defendants can maintain their cross-claim for contribution and indemnity against the Blakes defendants? [ 59 ] Given my reasons as set out above, this issue can only be resolved on a full adjudication of the issues and once the determination of whether the Blakes defendants owed a duty of care to David has been made.

The relief claimed by the Blakes defendants is therefore dismissed. Order [ 60 ] I order the following: [page116] (

i) the motion of Blake Cassels & Graydon LLP, Susan E. Slattery and Jillian Swartz for

summary judgment is dismissed; (ii) I urge the parties to agree on costs but if they are unable to do so, the plaintiff, John David Vincent, shall serve and file written costs submissions, no longer than two double-spaced pages, along with a costs outline, within 14 days. The defendants, Blake Cassels &

Graydon LLP, Susan E. Slattery and Jillian Swartz, shall serve and file written costs submissions, no longer than two double-spaced pages, along with a costs outline, 14 days thereafter. Any reply by the plaintiff shall be served and filed ten days thereafter. Motion dismissed. End of Document