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Are lawyers liable to intended beneficiaries?

Imagine a client comes into a lawyer’s office and instructs the lawyer to draft a will. The lawyer makes a mistake and one of the beneficiaries in the previous will who was supposed to inherit some money in the new will got left out. Could the beneficiary succeed in a law suit against the lawyer? Let’s take a look at the law.

Based on the Johnston Estate v. Johnston, 2017 BCCA 59, it would appear that the beneficiary of a former will may not succeed in a law suit against the drafting solicitor.

The British Columbia Court of Appeal examined whether a duty of care will be imposed upon a drafting solicitor taking instructions from a testator to protect the interests of beneficiaries under a prior last will and testament.

In 2007, Norman Johnston and his wife, Barbara Johnston, executed mirror wills whereby they left their estates to each other. Each of the mirror wills provided a gift over to their son, David Johnston, on the death of the survivor (“2007 Will”). In 2012, the deceased instructed his lawyer to prepare a new will following Barbara’s death (the 2012 Will). Pursuant to the 2012 Will, the deceased left $100,000.00 to the Faith Fellowship Baptist Church with the residue held in a discretionary trust for David during his lifetime. The 2012 Will appointed the Public Guardian and Trustee (“PGT”) as the trustee of the trust.

When the PGT brought a probate action for the 2012 Will (the “Probate Action”), David counterclaimed with lengthy pleadings that were “a rambling mixture of allegations of fact, evidence and argument.” The PGT brought a motion striking David’s pleading with leave to amend, or alternatively that his response and /or counterclaim be severed and stayed, among other relief.

PGT’s motion to strike

For Justice MacKenzie, the drafting of David’s response and counterclaim was problematic as it contained vague language and repetition. The deficiencies in David’s response and counterclaim were serious enough to hinder the court’s ability to discern his defences and claims as David’s pleadings were “plainly embarrassing and deficient.” As such, Justice MacKenzie ordered that David be given a reasonable opportunity to amend his pleadings, except for the claim based on the allegation that the drafting solicitor owed David a duty as a beneficiary under the 2007 Will. The Court ordered that the Probate Action be severed and tried separately from David’s counterclaim. The counterclaim was limited to the issues of testamentary capacity, undue influence, and due execution.

Appeal decision

On appeal, David argued that the motion judge erred by striking his claim against the solicitor. Pursuant to Hunt v. Carey Canada Inc. [1990] 2 SCR 959, a pleading will only be struck on the basis that it fails to disclose a reasonable cause of action if it is “plain and obvious” that the claim will fail. In determining that the claim against the drafting solicitor should be struck, Justice MacKenzie relied on Graham v. Bonnycastle, 2004 ABCA 270, where the majority held that imposing a duty of care on solicitors in favour of beneficiaries under a former will would create an untenable conflicts of interest for drafting solicitors. In Graham v. Bonnycastle, the Court of Appeal opined that allowing a duty of care may lead to greater reluctance on the part of solicitors when asked to act for elderly testators seeking to change their testamentary plans.

Following Graham v. Bonnycastle, the Court of Appeal held that there was no reason to impose a duty on solicitors taking instructions from a testator for a new will to protect the interests of beneficiaries under a former will. As a negligence claim cannot be established without a finding that a duty of care, the Court of Appeal held that it was “plain and obvious” that David’s claims against the drafting solicitor were bound to fail.

In Graham v. Bonnycastle, the Court held that a solicitor could owe a duty of care to a beneficiary under a former will where the solicitor has negligently excluded that beneficiary from his or her rightful bequest contrary to the testator’s “true” intentions or the intentions of the testator at the moment he or she possessed the requisite testamentary capacity. It is unfortunate that the Court of Appeal in Johnston Estate did not address this point in light of the fact that the Court determined that the deceased’s testamentary capacity continued to be a live issue in the litigation.

Vincent v. Blake, Cassels & Graydon LLP1

Traditionally, courts have recognized that lawyers who draft wills may be liable to the people the testator wanted to benefit if as a result of the lawyer’s negligence those intended beneficiaries did not receive their inheritance.2 The issue of solicitor’s liability to a beneficiary under a previous will was raised in the decision in Graham v. Bonnycastle which recognized that a solicitor may owe a duty to a beneficiary from a prior will where the solicitor has negligently excluded the beneficiary contrary to the testator’s “true” intentions.3 A testator’s “true” intentions are the intentions the testator had when he or she possessed capacity. This principle is expanded in Vincent v. Blake.

In this case, a woman, Orlie, passed way. Two months prior to her demise, she signed two wills and completed an estate freeze. The woman’s son, David, claimed his sister, Janice, unduly influenced their mother to treat him unequally. David sued the lawyers who drafted the wills and implemented the estate freeze. The law firm brought a motion for summary judgement claiming, in part, that the son did not have the standing to sue because lawyers do not owe a duty of care to beneficiaries under a previous will. The law firm’s motion was dismissed.

Ontario’s Superior Court of Justice held that it was possible that a solicitor owed a duty of care to a beneficiary under a prior will where the beneficiary’s interests align with the testator’s interests. In making this determination, the Court noted that the beneficiary was not challenging the validity of the last will, rather that the solicitor did not follow the testator’s instructions with respect to her property. The court’s analysis, in part, is very relevant to our question. If beneficiary and the testator’s interests were aligned, then it could be found that law firm was liable to the beneficiary because it had failed to ensure that testator’s wishes were honoured. Given the importance of the issue we quote paragraphs 44-46 in full:

“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 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.”

So returning to our question – will a beneficiary’s law suit against the lawyer succeed? The answer is that it depends on the facts of the case.

Footnotes
  1.   Vincent v. Blake, Cassels & Graydon LLP, 2013 ONSC 980.
     
  2.   Ross v Caunters, (1979) 3 All E.R. 580 (Eng. Ch. Div.)
     
  3.   Vincent v. Blake, Cassels & Graydon LLP, 2013 ONSC 980 at para. 59.
     

Charles Wagner and Rachael Kwan

The authors of this blog are Charles Wagner and Rachael Kwan. Charles is a Certified Specialist in Estates and Trusts and partner at Wagner Sidlofsky LLP and Rachael was an associate.

This Toronto office is a boutique litigation law firm whose practice is focused on estate and commercial litigation.

This blog is not intended to serve as a comprehensive treatment of the topic. It is not meant to be legal advice. Every case turns on its specific facts and it would be a mistake for the reader of this blog to conclude how it might impact on the reader’s case. Nothing replaces retaining a qualified, competent lawyer, well versed in this niche area of practice and getting some good legal advice.

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