The court said there are narrow circumstances where lawyers owe duty of care to non-clients
The Ontario Court of Appeal dismissed a litigant’s negligence and breach of fiduciary duty claims against a Toronto wills and estates lawyer on Tuesday, ruling that the lawyer did not owe the litigant a duty of care or a fiduciary duty because he was never actually her client.
The appellate court said that while lawyers generally owe duties only to their own clients, there is a narrow exception in will-drafting cases: if a lawyer represents a testator and fails to distribute benefits in accordance with the will.
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However, the appellate court said the exception does not apply here because the litigant, Nicolas Stingelin, was not an intended beneficiary of the will at issue.
The events leading up to Tuesday’s decision date back to 1992, when Monika Stingelin executed a declaration of trust under which she held legal title to four properties in Kitchener for the benefit of her sister. Monika held no beneficial interest in those properties.
The 2004 iteration of her will stipulated that her trusteeship of the four properties would be transferred into a new trust arrangement. Under that arrangement, the properties would be held for Monika’s sister and, upon her passing, for her sister’s son.
Monika died in 2011, and Nicolas became the trustee of her estate. The appellate court does not state the relationship between Monika and Nicolas.
In 2015, Monika’s sister hired Cynthia Woods, a lawyer who practises in Toronto’s west end, to prepare her will. She passed away the next year, leaving her estate to her two sons. Neither Nicolas nor Monika’s estate was a beneficiary.
When the sister’s estate asked Nicolas to transfer the Kitchener properties, he refused. An Ontario court ruled that Monika’s 1992 trust remained valid and that her sister beneficially owned the properties.
Nicolas then sued Woods, whom he had met twice, arguing that he relied on her legal advice and suffered damages, including legal costs, emotional distress, and reputational harm. Woods filed a motion for summary judgment and succeeded.
The OCA upheld the lower court's ruling, noting that all parties agreed that Woods never acted as Nicolas’ lawyer and that there was no solicitor-client relationship between them.
To determine whether Woods owed a duty of care to Nicolas even though she was not his lawyer, the appellate court looked to a 2003 OCA decision, Hall v. Bennett Estate, which held that there must be “a sufficient relationship of proximity between the parties” for a lawyer to owe a duty of care to a non-client. The OCA noted on Tuesday that, according to Hall, a retainer is “fundamental to the proximity analysis and that, absent a retainer to prepare the will, no duty arose to the prospective beneficiary.”
Nicolas “was not an intended beneficiary of [Monika’s sister’s] Sabina’s will,” the OCA said. “Sabina’s 2016 will provided equally for [her sons]. It did not name the appellant or Monika’s estate.”
The OCA noted that Nicolas was asking the court to recognize a new duty of care “extending beyond the limited class recognized in the will-drafting cases” it had cited, and declined to do so.
The appellate court also rejected Nicolas’ claim that there was an “ad hoc fiduciary relationship” between himself and Woods.
“Such a relationship requires an undertaking to act in the claimant’s best interests and defined beneficiaries vulnerable to the fiduciary’s discretionary power affecting their legal or substantial practical interests,” the OCA said. “None of those elements are present.
“The respondent acted solely for Sabina and owed her undivided loyalty.”
Counsel for the parties did not respond to requests for comment.
