Legal Blog

Lawyer’s Duty of Care

Nieuwenhuis v. FRP Inc. cob Rico Tech 2020 Ont SCJ

A vendor sued the purchaser for the deposit of $175,000 on an aborted real estate transaction, Because the vendor’s lawyers were holding the deposit, the vendor added its lawyers as party defendants – only to ensure that the money would be paid. The purchaser crossclaimed against the lawyers, claiming that deal did not close because the lawyers improperly inserted conditions in the contract. The judge held that there was no duty of care owed by the vendor’s lawyers to the purchaser and dismissed the crossclaim as showing no reasonable cause of action. Query: why would the vendor have sued its own lawyers? Presumably, a simple undertaking to hold the money in trust pending a decision of the court should have been satisfactory.

Written by Jonathan Speigel, the founding partner of Speigel Nichols Fox LLP, leads the litigation and construction practices.