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BARRISTERS AND SOLICITORS - Liability - Negligence - In real estate transactions

Monday, June 29, 2020 @ 10:10 AM  


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Action by Fadelle for damages from the defendant lawyer, Samuelsen, for negligence. Fadelle lost her home in a house fire in September 2009. The property was uninsured on the date of the loss. In the spring and summer of 2009, Samuelsen acted as Fadelle’s lawyer in handling a mortgage refinancing of the property. He admitted that he erroneously allowed the mortgage to be placed and funds released without a confirmation of insurance being in place. Fadelle said that Samuelsen’s office became aware of the insurance problem prior to the fire but failed to advise her or the mortgage company. She took the position that Samuelsen was liable in damages for her significant losses. Samuelsen took the position that if he failed to meet any legal obligations, those were duties owed to the lender only, and not to Fadelle. He submitted that Fadelle alone had the obligation to secure insurance and failed to do so. He further submitted that the evidence indicated that Fadelle was aware the property was uninsured. Samuelsen raised issues of contributory negligence.

HELD: Action allowed in part. A lawyer had a duty to make sure his clients had insurance on the property being charged by a mortgage. In this case, there were manifest failures of management and process. Samuelsen’s provision of legal services to Fadelle failed to meet the standard of care of a reasonably competent solicitor in the circumstances. Fadelle needed the financing and was highly motivated in that regard. Had she been properly advised and told that the only means of securing the financing was to get coverage in place, she would have acted to do so. But for the failings of Samuelsen, Fadelle had a real and substantial opportunity to avoid the loss which she suffered. However, Fadelle was an experienced business person and had the original duty to secure coverage. She was found 30 per cent contributorily liable for her own losses. Fadelle was awarded $176,186 in damages.

Fadelle v. Samuelsen, Fadelle v. Samuelsen, [2020] N.S.J. No. 192, Nova Scotia Supreme Court, J.R. Hunt J., May 19, 2020. Digest No. TLD-June292020002