Ozerdinc Family Trust v Gowling – Ontario Superior Court of Justice finds that the test of causation of damages from professional negligence is a “but for” test

It was acknowledged that a tax lawyer had fallen below the relevant standard of care in failing to advise clients that a new family trust which replaced an old family trust would, by virtue of s. 104(5.8), have a deemed disposition of its assets only four years later - which, in fact, occurred (see Grimes). The law firm argued that it should not be treated as the proximate cause of the loss, as the clients’ accounting firm should have been keeping track of the deemed disposition date.

Labrosse J applied Clements v. Clements, 2012 SCC 32 (“the test for showing causation is the ‘but for’ test… in other words that the injury would not have occurred without the Defendant’s negligence”) in finding that causation had been made out. The question of the degree of any negligence of the accounting firm only went to any liability of them for contribution and indemnity once an award of damages was made against the defendants in this action (the tax lawyer and his firm).

Neal Armstrong. Summary of Ozerdinc Family Trust v Gowling, 2017 ONSC 6 under General Concepts – Negligence.