A Commentary on Recent Legal Developments by the Opinions Group
of McCarthy Tétrault LLP
The Supreme Court of Canada denied leave to appeal this week from three
cases of interest to Canadian businesses and professions.
The first, Wightman c. Widdrington (Succession de), 2013 QCCA 1187, involved a test case on behalf
of investors claiming over $1 billion against
an accounting firm and its Canadian partners arising out of
the 1992 bankruptcy of Castor Holdings Ltd. The investors had
made loans to Castor or invested in it on the strength of
the defendants' inaccurate audit reports, and the
defendants were found liable for their negligence in auditing
Castor after a lengthy trial. The Court of Appeal
substantially upheld the finding of liability, which was made under
the civil laws of Quebec pursuant to the lex loci delicti
choice of law rule, despite the defendants' argument that
the laws of New Brunswick should govern (as the place where Castor
was incorporated). The leave application to the Supreme
Court of Canada raised a host of interesting questions of
significance to the accounting profession, including "whether
[the] law applicable to auditors' liability is [the] law
of [the] province of incorporation of [the]
audited corporation or [the] law of province where fault
occurred", "whether [the]
'law of province where fault occurred' is [the]
law of province where negligent auditing work [is] conducted or
[the] law of province where financial losses incurred"
and "whether auditors can be held liable for damages
incurred by third parties having relied on audited financial
statements and opinions and having incurred losses due to
negligence of auditors".
The second case is Dominion of Canada General Insurance
Company v. Hannam, 2013 NLCA 37. It concerned the scope of
an insurer's duty to defend under a homeowner's
insurance policy containing an "ownership, use or
operation" exclusion, in circumstances where the insured had
been sued by a person who was injured from the operation of a
recreational vehicle which the insured's child had
allowed another child to operate. The issues raised in the
leave application included whether "allowing another child to
operate the insured's vehicle constitute[s] a
'use' of the vehicle engaging [an] exclusionary clause in
a homeowner's policy", whether there
exists "a tort of negligent entrustment which imposes
liability on a parent based on an expanded definition of
'use' or a parent's ownership of a recreational
vehicle" and whether "liability for negligent
parental supervision [is] derivative of a tort of negligent
The third case consisted of the two related appeals in
Lévesque c. Hudon, 2013 QCCA 920 and Hudon c.
Carpentier, 2013 QCCA 921. They concerned medical
negligence claims against a hospital and two physicians which were
unsuccessful in the Court of Appeal based on a lack of
causation. One of the issues raised in the leave to appeal
application was whether it was appropriate to reverse the burden of
proof so it rests on defendants and thus to presume causation.
It's not often that our little blog intersects with such titanic struggles as the U.S. presidential race – and by using the term "titanic" I certainly don't mean to suggest that anything disastrous is in the future.
J.J. v. C.C., is an interesting case in which the court held that an automotive garage owes a duty to minor children to secure the vehicles on the premises by locking the cars and safely storing the car keys...
In Irwin v. Alberta Veterinary Medical Association, 2015 ABCA 396, the Alberta Court of Appeal found that the "ABVMA" failed to afford procedural fairness to a veterinarian undergoing an incapacity assessment.
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