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Instructions

Posted on February 1, 2007 | Posted in Lawyers' Issues

Lawyers must keep confidential the dealings that they have with their clients unless they have contrary instructions. What happens when a lawyer is tricked into revealing confidential information? This was dealt with in Gidda v. Malik Law Office [2006] O.J. No. 4230 (SCJ).

Subterfuge

Lawyer acted for a vendor who was selling his property privately. However, in doing so, the vendor was attempting to cheat a real estate agent, with whom he had a listing, out of a commission. The salesperson called the lawyer’s assistant, represented that she was the real estate agent for the vendor on the private sale, and obtained a copy of the private agreement of purchase and sale. The real estate agent sued the vendor for the commission provided under the listing agreement and obtained a judgment for $10,000.

The vendor then sued the lawyer for releasing the private agreement for sale. The Small Claims Court judge dismissed the action solely because, by the time of the action, the vendor had not paid the real estate agent and therefore had not proven any damages. The vendor appealed.

Damages

By the time of the appeal, the vendor had paid the real estate agent. In any case, the judge held that, regardless whether the vendor had paid the agent, the agent had filed an execution and the vendor was bound to pay the agent. Accordingly, the judge held that the vendor did have damages.

Cause

The judge, however, held that the vendor failed to show that the lawyer’s negligence (since he was responsible for his assistant’s actions) caused the vendor’s damages. The judge held that:

1.   The agent knew of the private sale and was unlikely to allow herself to be cheated out of her commission for want of a copy of the agreement. She could have obtained the sale information from the public record and the vendor would have had to testify to the agreement in any case.

2.   The vendor was liable to pay the agent’s commission by virtue of the listing agreement. As stated in a 1920 House of Lords decision, “a man is not damnified by being compelled to satisfy his legal obligation.” The lawyer did not breach the listing agreement; the vendor did.

Accordingly, the judge dismissed the appeal.

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