In this decision, the Court of Appeal affirmed that a cause of
action for solicitor's negligence is assignable. As part of a
plan of arrangement of Royal Trust, Gentra Canada Investments Inc.
("Gentra") was assigned a mortgage.
Gentra brought an action against Lipson and his firm alleging
breach of contract and negligence due to alleged deficiencies in
mortgage documents prepared by Lipson while he was counsel for
Gentra brought a motion for partial summary judgment to confirm
its right to pursue the action. Lipson asserted by way of a
cross-motion that an action for solicitor's negligence is
non-assignable as a matter of public policy. The court held that a
cause of action for solicitor's negligence is assignable if an
assignee can show a legitimate commercial interest in the cause of
action against the lawyer. It rejected the contention that such an
assignment "savours of maintenance".
Lipson also argued that the cause of action was not properly
assigned. The court held that there is no need for an assignment of
a cause of action to be explicit and that it is sufficient if the
language of the assignment is capable of identifying the cause of
action as one of the things assigned. In this case, the language of
the assignment was sufficient to encompass the claim against
Lipson. Moreover, the court noted that the purpose of the
assignment was to place Gentra in the position of Royal Trust in
respect of its underperforming loans, and a consideration of this
context affirmed that Gentra had a legitimate commercial interest
in the cause of action.
The court also rejected Lipson's contention that Gentra
could not bring the action because of non-compliance with the
Conveyancing and Law of Property Act. In the
circumstances, the court found that Royal Trust was not a necessary
party to the action and that Gentra was the appropriate
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