Lawyer breached duty by continually recommending financial products without performing due diligence

Supreme court | Professions and Occupations | Barristers and solicitors | Negligence

Lawyer encouraged his client to invest her money and her company’s money in two offshore hedge funds. Funds turned out to be parts of Ponzi scheme and their assets were frozen. Client suffered significant financial losses and brought action for damages against lawyer. Trial judge held that lawyer had not provided investment advice to client. Trial judge held that lawyer could not be held liable for the fraud. Trial judge held that lawyer was not in position of conflict of interest. Trial judge dismissed action and client appealed. Court of Appeal held that trial judge had made palpable and overriding errors. Court of Appeal ordered lawyer to fully compensate client and her company. Lawyer appealed. Appeal dismissed. Lawyer breached his duty to advise client by providing advices that exceeded his professional capabilities and proved to be wrongful. Lawyer also breached this duty by continually recommending financial products without performing due diligence. Further, lawyer turned blind eye to conflict of interest which resulted in sacrificing his client’s interests. Taken together, lawyer’s faults were true cause of losses suffered by client and her company. Therefore, Court of Appeal did not err in interfering with trial judge’s findings.

Salomon v. Matte-Thompson (2019), 2019 CarswellQue 764, 2019 CarswellQue 765, 2019 SCC 14, 2019 CSC 14, Wagner C.J.C., Abella J., Moldaver J., Karakatsanis J., Gascon J., Côté J., Brown J., Rowe J., and Martin J. (S.C.C.); affirmed (2017), 2017 CarswellQue 1076, 2017 QCCA 273, Kasirer J.C.A., Vauclair J.C.A., and Parent J.C.A. (C.A. Que.).

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