Law Times

January 16, 2017

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Page 2 January 16, 2017 • Law Times instance the judge kept them separate. "This case is also an impor- tant example for the parties to think about whether a third- party action really should be tried with the main action and that it doesn't necessarily always have to be," she says. "And for that reason there are strategic considerations for counsel." The issue of damages was not dealt with through the partial summary judgment motion and will be addressed at trial. A spokesman for Gowlings declined to comment on the decision "as the matter is still be- fore the court." Siegel has retired from the firm. Allan O'Brien, who represented Gowlings in the matter, did not respond to requests for comment. Caza says while its common for plaintiffs to file liable law- suits against as many defendants as possible, his clients only com- menced litigation against Gowl- ings, as the law firm was who they depended on. He says the whole summary judgment turned mainly around this issue, as Gowlings' argu- ment against partial summary judgment was that the accoun- tants were also liable. "Oen what people will do is they'll cast in a wide net in order to get in as many defendants as they can, because arguably somebody could say you have accountants that are working with you. Maybe the accountants are liable," he says. "Instead of using a wide net, they basically used a spear." LT gel never told them about this issue. "The law is clear that even though that new trust was creat- ed, the 21-year clock keeps tick- ing," says Caza, a partner with CazaSaikaley LLP. "That issue was never taken into issue or raised with the cli- ent." In 2011, Grimes received a phone call from the Canadian Revenue Agency looking for significant taxes that were owed, Caza says. Labrosse granted the plain- tiffs partial summary judg- ment, finding that Ozerdinc and Grimes experienced the tax consequences they did because Siegel had failed to advise them of the impending deemed dis- position. The judge also found that Siegel failed to provide tax- planning measures that could have avoided taxes from the deemed disposition of the trust. Lawyers say the decision shows that summary judgment can be granted even in matters that are particularly complex, such as tax issues. Hilary Book, a partner with Lax O'Sullivan Lisus Gottlieb LLP, says the decision reinforces that litigators need to be aware of whether summary judgment is available. "It's available in a lot more places then we might have tra- ditionally thought five years ago before the rule change or before the Hryniak decision," says Book, who did not act in the case. "That's just something that every civil litigator needs to have in their strategic arsenal." Gowlings challenged whether it had caused the client's damages and said a third-party account- ing firm — Raymond Chabot Grant Thornton LLP — was re- sponsible for advising the clients of potential tax mitigation strate- gies and for tracking the 21-year deemed disposition date. Gowlings admitted that it was liable for Siegel's actions and that he had fallen below "the standard of care of a reasonably prudent tax lawyer," according to the decision. However, the firm claimed it was not responsible for the cau- sation of damages. The firm filed a cross-motion that would have effectively con- solidated the Ozerdinc action with one the firm had launched against the third party, arguing the matter addressed in the par- tial summary judgment motion should go to trial as there were common issues between the two actions. Sally Gomery, who repre- sented the accounting firm, says the law firm was responsible for advising the plaintiffs about potential tax consequences as it had set up the two family trusts. "Raymond Chabot was not involved at all in setting up those trusts, never gave advice on those trusts [and] in fact wasn't even aware that the sec- ond trust had been set up until after the fact," she says. Labrosse found that as the ac- counting firm was not a party in the action, he could not consider the third party's role and could only assess causation with respect to Gowlings. The judge also dis- missed Gowlings' cross-motion. Book says it is common for a main action and third party to be heard together, but in this any form of immunity in respect to liability for an accident. "This case reinforces that a driver who is viewed at least on the facts of the case as hav- ing had an opportunity to po- tentially avoid a collision but because of their actions created circumstances where they were unable to do so, in that type of a circumstance, there may be a finding of liability against that party," says Elman, who did not act in the case. The City of Ottawa and Rich- er argued in their appeal that Roccamo had erred in apply- ing a higher standard of care to Richer as a professional driver, but the Court of Appeal rejected this argument. The city also argued that it was unfair to find Richer was negligent for looking away from the intersection to check his mir- rors, as he had been instructed to do so in a driver's manual. The court disagreed, saying the manual "is not a mandatory or absolute requirement." The court also said that this was one of a number of factors that included his speed and his failure to adjust to the weather conditions. Alisa Mazo, of Mazo Chow- bay Personal Injury Lawyers, says she found the decision sur- prising. Mazo, who did not act in the case, says the decision will be helpful for personal injury law- yers who have clients who may appear to be wholly responsible for their collisions but may ac- tually share responsibility with others. "Given this new decision, you have something to hang your hat on to say, 'Well, let's look at this decision where a bus driver going through a green light is attributed 20-per-cent liability,'" she says. Mazo says the judge's find- ing that Richer and the city were 20-per-cent liable was high. Peter Cronyn, the lawyer who represented the Gardiners, says it was necessary to sue the city in addition to MacDonald, as the bus driver could have helped avoid the accident if he was meeting the standard of care. "While Mark MacDonald was wrong, the bus driver was also wrong. He shouldn't have been doing what he was doing," he says. "I think it's important to hold him accountable for that." He added that the city had an uphill battle in its appeal, which was apparent in the way the Court of Appeal upheld the decision. The court did not even call upon Cronyn to argue, dismiss- ing the appeal from the bench with reasons to follow. Cronyn says it was also im- portant to bring suit against the city, as Gardiner's damages would be in the millions and it was clear MacDonald's insurer would not have to pay enough to cover the damages. In the original proceedings, the parties agreed on $2.1 mil- lion in damages. Despite the fact that the City of Ottawa was found 20-per- cent liable, it will end up paying the majority of the damages as MacDonald's insurance policy paid only $200,000, which was split between the Gardiners and another plaintiff. MacDonald's insurer will have to pay only $200,000, as he had been drinking with a G2 li- cence when the crash happened. Insurers can decline coverage in such an instance, but they have to pay the basic minimum cov- erage, which is $200,000 in On- tario. Jonathan de Vries, one of the lawyers representing the city and Richer on the appeal, declined to comment. LT NEWS Continued from page 1 Lawyer failed to provide tax-planning measures Insurer to pay $200,000 Continued from page 1 SKIMMING THE SURFACE IS FINE UNTIL A DEEPER DIVE IS REQUIRED. Start with Practical Law Canada. Whether you need a surface view or a deeper understanding of a legal issue, Practical Law Canada offers up-to-date, straightforward how-to guides, annotated standard documents, checklists, and more. Our expert lawyer-editors have significant practice experience. They create and maintain hundreds of practical resources to match the needs of practitioners in the following practice areas: • Capital Markets & Securities • Corporate and M&A • Commercial Transactions • Employment • Competition • Finance • Corporate & Commercial Litigation For more information or to sign up for a free trial, visit © 2016 Thomson Reuters Canada Limited 00242CZ-85651-NK Untitled-1 1 2017-01-10 12:20 PM

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