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CRA - The Tort Three-Test for Reasonable Foreseeable

November 1, 2021

Ontario

,

Canada

Issue

Can a plaintiff claim the value of appreciation of an asset that they sold before the appreciation occurred due to negligent advice?

Conclusion

No cases were located outlining whether a plaintiff can claim for lost property value appreciation where they sold certain property to pay CRA penalties levied against them based on an accountant's negligent advice. Some guidance may be gleaned from cases discussing consequential damages more broadly.

Parties are limited to the ordinary natural consequences of a contract breach or for consequences that might reasonably have been in the contemplation of both parties when they made the contract. Actual consequences that fall outside that category are considered to be too remote, and cannot be recovered. This test is described as being very similar to, if not the same, as the tort threshold for reasonable foreseeability. Courts have frequently on this basis granted damage awards for injuries that are a consequence of the misconduct. It is important to note that specific knowledge of a potential downstream effect is not required. In Calgary (City) v. Costello, Justice Picard evaluated the threshold for proof that a tortfeasor had deprived a landowner of the opportunity to sell a property at a future point, in the midst of a real estate boom. The requirement was not to prove the future sale and resulting benefit was probable, but “... they did bear the burden of establishing that there was a real and substantial possibility of sale." Diversion of capacity that otherwise may have provided benefit is a further example of a potential consequential damage claim. VK Mason Construction Ltd v Bank of Nova Scotia, involved negligent misrepresentation by a bank that caused a general contractor to enter into a contract with a partner who was inadequately financed. Delays and overruns ensued. Wilson J awarded damages for loss of anticipated profit from other projects that the general contractor would have otherwise taken on, were it not for the Bank’s negligent misrepresentation. (Malton v Attia)

In Malton v Attia, the Court dealt with a matter involving negligence advice provided by a lawyer to a couple. The lawyer advised the couple to use certain funds to repair deficient properties they purchased as a form of mitigation. As a result of this, the couple used all the funds they intended to invest to make the necessary repairs instead. The Court found that the lawyer was liable for the loss of investment opportunity. His bad advice about damages and mitigation meant that they did not invest in those properties at all, which loss was attributable to him. The Court found that because he was aware of the couples' plans for their investment funds, there was a corresponding consequential loss claim for which he was responsible.

The law may be summarized as follows. The basic rule is that damages for lost profits, like all damages for breach of contract, must be proven on a balance of probabilities. Where it is shown with some degree of certainty that a specific contract was lost as a result of the breach, with a consequent loss of profit, that sum should be awarded. However, damages may also be awarded for loss of more conjectural profits, where the evidence demonstrates the possibility that contracts have been lost because of the breach, and also establishes that it is probable that some of these possible contracts would have materialized, had the breach not occurred. In such a case, the court should make a moderate award, recognizing that some of the contracts may not have materialized had there been no breach. The matter may be put another way. Even though the plaintiff may not be able to prove with certainty that it would have obtained specific contracts but for the breach, it may be able to establish that the defendant's breach of contract deprived it of the opportunity to obtain such business. The plaintiff is entitled to compensation for the loss of that opportunity. But it would be wrong to assess the damages for that lost opportunity as though it were a certainty. (Houweling Nurseries Ltd. v. Fisons Western Corporation)

Consequential damages are recoverable if they are reasonably foreseeable. Where two parties have made a contract which one of them has broken, the damages which the other party ought to receive in respect of such breach of contract should be such as may fairly and reasonably be considered either arising naturally, i.e., according to the usual course of things, from such breach of contract itself, or such as may reasonably be supposed to have been in the contemplation of both parties, at the time they made the contract, as the probable result of the breach of it. (Toronto Industrial Leaseholds Ltd. v. Posesorski)

The law is clear that legal costs, including the costs of litigation reasonably incurred to extract the client from the situation caused by a negligent solicitor, are recoverable as consequential damages. (Kalish v. Rosenbaum)

Law

In Malton v Attia, 2015 ABQB 135 (CanLII) (rev'd on other grounds, 2016 ABCA 130), the Court dealt with a matter involving negligence advice provided by a lawyer to a couple. The lawyer advised the couple to use certain funds to repair deficient properties they purchased as a form of mitigation. As a result of this, the couple used all the funds they intended to invest to make the necessary repairs instead. The Court found that the lawyer was liable for the loss of investment opportunity. His bad advice about damages and mitigation meant that they did not invest in those properties at all, which loss was attributable to him. The Court found that because he was aware of the couples' plans for their investment funds, there was a corresponding consequential loss claim for which he was responsible.

Moen J. held that parties are limited to the ordinary natural consequences of a contract breach or for consequences that might reasonably have been in the contemplation of both parties when they made the contract. Actual consequences that fall outside that category are considered to be too remote, and cannot be recovered. This test is described as being very similar to, if not the same, as the tort threshold for reasonable foreseeability. Courts have frequently on this basis granted damage awards for injuries that are a consequence of the misconduct. It is important to note that specific knowledge of a potential downstream effect is not required. In Calgary (City) v. Costello, 1997 ABCA 281 (CanLII), Justice Picard evaluated the threshold for proof that a tortfeasor had deprived a land owner of the opportunity to sell a property at a future point, in the midst of a real estate boom. The requirement was not to prove the future sale and resulting benefit was probable, but “... they did bear the burden of establishing that there was a real and substantial possibility of sale.". Diversion of capacity that otherwise may have provided benefit is a further example of a potential consequential damage claim. VK Mason Construction Ltd v Bank of Nova Scotia, involved negligent misrepresentation by a bank that caused a general contractor to enter into a contract with a partner who was inadequately financed. Delays and overruns ensued. Wilson J awarded damages for loss of anticipated profit from other projects that the general contractor would have otherwise taken on, were it not for the Bank’s negligent misrepresentation:

d. Consequential Damages

[557] The question then: is Attia liable for the loss of investment opportunity? I find that he is.

[558] Attia’s bad advice about damages and mitigation meant that the Maltons did not invest in those properties at all. That loss is attributable to him.

[559] Parties are limited to the ordinary natural consequences of a contract breach or for consequences that might reasonably have been in the contemplation of both parties when they made the contract.

[560] Actual consequences that fall outside that category are considered to be too remote, and cannot be recovered.[92]

[561] Attia said with respect to the HouseMaster claim for consequential losses that if the Maltons had told HouseMaster of their retirement plans then the result would be different, but they did not, so this basis for a damages award from HouseMaster was extinguished. Here Attia ought to have been in contemplation of the damages arising from the Maltons using their investment funds to repair the House. They told him about their investment plans and that they were using the money to repair the House.

[562] In Asamera Oil Corp. Ltd. v Sea Oil & Gen. Corp.; Baud Corp. NV v Brook,[93] Justice Estey reviewed the state of the law. Not all kinds of losses are recoverable; the proper test is not reasonable foreseeability but rather “... whether the probability of the occurrence of the damage in the event of breach should have been within the reasonable contemplation of the contracting parties at the time of the entry into the contract.”[94]

[563] In BG Checo Int. Ltd. v British Columbia Hydro & Power Authority at para 48 this test is described as being very similar to, if not the same, as the tort threshold for reasonable foreseeability:

... We note that in this respect the test for remoteness in contract may be of no practical difference from the test of reasonable foreseeability applicable in tort. ...

[564] Courts have frequently on this basis granted damage awards for injuries that are a consequence of the misconduct. For example, in BG Checo Int. Ltd. v British Columbia Hydro & Power Authority the Supreme Court of Canada ordered damages not only that flowed from an improperly prepared worksite, but also for indirect costs that were a consequence of that breach, including costs that flowed from the need for the injured party to take additional and costly steps to accelerate construction.

[565] It is important to note that specific knowledge of a potential downstream effect is not required. In BPI Resources Ltd. v Merrill Lynch Canada Inc.:[95]

The Appellant by cross-appeal asserts that in cases of pure economic loss, the contract standard of remoteness applies. Generally, reasonable foreseeability of damage would not be sufficient to impose liability, the argument goes, but it must be established that the tortfeasor had adequate knowledge of the special circumstances to foresee the exact loss that occurred. In my view, this argument cannot be sustained. When liability is grounded in tort, the test for remoteness is reasonable foreseeability ... [Emphasis added, citations omitted.]

[566] In Costello v Calgary (City),[96] Justice Picard evaluated the threshold for proof that a tortfeasor had deprived a land owner of the opportunity to sell a property at a future point, in the midst of a real estate boom. The requirement was not to prove the future sale and resulting benefit was probable, but “... they did bear the burden of establishing that there was a real and substantial possibility of sale. ...” [emphasis added].

[567] Diversion of capacity that otherwise may have provided benefit is a further example of a potential consequential damage claim. VK Mason Construction Ltd v Bank of Nova Scotia,[97] involved negligent misrepresentation by a bank that caused a general contractor to enter into a contract with a partner who was inadequately financed. Delays and overruns ensued. Wilson J awarded damages for loss of anticipated profit from other projects that the general contractor would have otherwise taken on, were it not for the Bank’s negligent misrepresentation and at 285 concluded

... in principle one is entitled to assume that Mason would have found a profitable means of employing itself had it not been induced to work on the Courtot project by the Bank's misrepresentation. ...

[568] There are many examples in the case law of businesses that, having entered a bad transaction, lose the opportunity to enter other good transactions. In Houweling Nurseries Ltd v Fisons Western Corp,[98] McLachlin JA (as she then was) summarized the law on damages for lost profits as follows:

... The basic rule is that damages for lost profits, like all damages for breach of contract, must be proven on a balance of probabilities. Where it is shown with some degree of certainty that a specific contract was lost as a result of the breach, with a consequent loss of profit, some should be awarded. However, damages may also be awarded for loss of more conjectural profits, where the evidence demonstrates the possibility that contracts have been lost because of the breach, and also establishes that it is probable that some of these possible contracts would have materialized, had the breach not occurred. In such a case, the court should make a moderate award, recognizing that some of the contracts may not have materialized had there been no breach.

[569] In Victoria Laundry (Windsor) Ld. v Newman Industries, Ltd.,[99] Lord Asquith observed:

In order to make a contract-breaker liable ... it is not necessary that he should actually have asked himself what loss is liable to result from a breach. ... It suffices that, if he had considered the question, he would as a reasonable man have concluded that the loss in question was liable to result. ...

[570] I therefore conclude if Attia had considered the consequence of negligent legal advice, he would have known precisely the damage here. The loss of capital gains in property the Maltons could not buy because they took the path of repair on Attia’s advice and used their investment funds to repair.

[571] Further, given that the Maltons enquired about this very issue relating to HouseMaster, Attia ought to have had this front and centre in his mind. The law relating to consequential loss, I would anticipate a reasonably competent lawyer would either know or discover early in the litigation, particularly when his clients are enquiring about it.

[572] Ms. Malton entered evidence of the historical increase in the average sale price of a residential property in Edmonton, which increased, between October, 2000 and October, 2001 by an average of $123,543.00 to an average of $134,051.00, an increase of 8.5%.[100] As I cannot find on a balance of probabilities that Lee J would have awarded consequential losses, I cannot attribute any consequential loss to Attia for this time period.

[573] Attia was responsible, however, for the loss of return on investment for two rental properties from October 2001 when the alternative scenario says they would have invested, to June 2008 when I have found the Maltons would have sold their Edmonton property and moved to British Columbia.

[574] All of the Maltons’ investment funds were tied up in unnecessary repairs to the House on Attia’s advice. This is not a question of remoteness. I find that Attia knew about the investment plans very early in the litigation. He knew the consequences of the Maltons putting everything into repair of the House. He did not concern himself with this.

[575] I am presuming that the rental revenues they received from the investment properties would cover the mortgage and other expenses for the properties and am not calculating any equity being accumulated by virtue of the mortgage payments. In any event, I do not have the evidence to make this calculation.

[576] The other issue is the House and whether consequential damages could be claimed for it. The law is clear that the damages for the House could not be calculated on a consequential basis. For the House, the damages would be the difference between the price paid and the actual value of the House plus pre-judgment interest (damages for House). That actual value would have crystalized at trial because the House would have been sold on an arm’s length transaction prior to the trial.

[577] I conclude that consequential damages would not have been awarded at the HouseMaster Action trial. Once the properties were purchased in the fall of 2001, the Maltons would have completely mitigated their damages with respect to their investment losses, except for the interest payments which they would have paid on one investment property in which they would live until the House was sold as set out above.

[578] I find that Attia was aware of the Maltons’ plans for their investments funds. As such, there is also a corresponding consequential loss for which Attia is responsible, the quantum which I discuss in the damages section.

In Houweling Nurseries Ltd. v. Fisons Western Corporation, 1988 CanLII 186 (BC CA), McLachlin J., for the Court, outlined the law with respect to damages for lost profits as follows:

In my view, the law may be summarized as follows. The basic rule is that damages for lost profits, like all damages for breach of contract, must be proven on a balance of probabilities. Where it is shown with some degree of certainty that a specific contract was lost as a result of the breach, with a consequent loss of profit, that sum should be awarded. However, damages may also be awarded for loss of more conjectural profits, where the evidence demonstrates the possibility that contracts have been lost because of the breach, and also establishes that it is probable that some of these possible contracts would have materialized, had the breach not occurred. In such a case, the court should make a moderate award, recognizing that some of the contracts may not have materialized had there been no breach.

The matter may be put another way. Even though the plaintiff may not be able to prove with certainty that it would have obtained specific contracts but for

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the breach, it may be able to establish that the defendant's breach of contract deprived it of the opportunity to obtain such business. The plaintiff is entitled to compensation for the loss of that opportunity. But it would be wrong to assess the damages for that lost opportunity as though it were a certainty.

In Toronto Industrial Leaseholds Ltd. v. Posesorski, 1994 CanLII 7199 (ON CA), clients purchased an industrial property which, due to their solicitor's negligence, they did not realize was subject to an option to lease at below current market rate. The clients sought damages for the negligence, including consequential damages.

With respect to consequential damages, Galligan J.A. held that consequential damages are recoverable if they are reasonably foreseeable. Where two parties have made a contract which one of them has broken, the damages which the other party ought to receive in respect of such breach of contract should be such as may fairly and reasonably be considered either arising naturally, i.e., according to the usual course of things, from such breach of contract itself, or such as may reasonably be supposed to have been in the contemplation of both parties, at the time they made the contract, as the probable result of the breach of it:

In my opinion Mr. Solway's position that the clients' damages are restricted to the difference between the price paid and the market value at the time of purchase cannot be sustained in the light of Kienzle v. Stringer. That case is also authority for the proposition that consequential damages are recoverable if they are reasonably foreseeable. When I held that the clients' damages in this case ought to have been assessed at $260,000, I am not to be taken as holding that their damages are restricted to that amount. That amount is an important element of their damages, but it is not necessarily the only one.

Kienzle v. Stringer establishes that the test for assessing damages in a solicitor's negligence case is that of reasonable foreseeability. At p. 89 Zuber J.A. said:

One problem that intrudes but briefly in this case is whether the liability of the solicitor is based in contract alone or in tort as well. (See again, Messineo v. Beale, supra). However, in this case, the queston is of little consequence. Liability is admitted, no limitation period intervenes: the sole question is the question of damages. The extent of recovery for damages from breach of contract is described in the classic words of Baron Alderson in Hadley v. Baxendale (1854), 9 Exch. 341 at 355, 156 E.R. 145 at 151:

Where two parties have made a contract which one of them has broken, the damages which the other party ought to receive in respect of such breach of contract should be such as may fairly and reasonably be considered either arising naturally, i.e., according to the usual course of things, from such breach of contract itself, or such as may reasonably be supposed to have been in the contemplation of both parties, at the time they made the contract, as the probable result of the breach of it.

In tort, the measure is reasonable foreseeability. It is, I think, apparent that neither of these tests is a measure of precision and I number myself among those who are unable to see any real difference between them. (See H. Parsons
(Livestock) Ltd. v. Uttley Ingham & Co. Ltd., [1978] Q.B. 791, [1978] 1 All E.R. 525).

For the purpose of simplicity, I shall use the term "reasonable foreseeability" as embracing the test in both tort and contract. Using this measure, we come to the case at hand.

(Emphasis added)

In that case the client had shut down the effective operation of the Oxford Farm because he thought he had sold it. When the sale fell through the client could not "do much with" the farm and his profit from it "dropped drastically". His lost profit was assessed and allowed as a consequential damage because it was found to be within the "ambit of reasonable foreseeability".

The option to rent at a rate which was not economical in 1984 would affect the clients' ability to rent the property profitably. That inability would clearly be within the ambit of reasonable foreseeability. It was reasonably foreseeable that the existence of the option could cause economic loss to the clients in the operation of their investment property. I am unable to find any distinction in principle between this case and Kienzle v. Stringer. It follows, therefore, that the clients' expenses were recoverable consequential damages and, in my opinion, ought to have been allowed.

The majority similarly held that if consequential damages are reasonably foreseeable, the client is entitled to be compensated for those losses:

I would also emphasize that the measure of damages described in Messineo is not necessarily exhaustive of the full measure of damages suffered by clients in every case. The negligent solicitor is responsible for all reasonably foreseeable damages caused by his or her negligence. In some cases, there may be consequential damages in addition to those reflected in the difference between the amount paid by the client and the market value of the property. If those consequential damages are reasonably foreseeable, then the client is entitled to be compensated for those losses on top of any award assessed using the Messineo formula.

Kienzle, supra, is instructive with respect to the assessment of consequential damages. As indicated above, the trial judge had purported (wrongly, in my view) to apply Messineo in assessing the client's damages. The trial judge went on to hold that with a very limited exception, Messineo provided the full measure of the client's damages. The Court of Appeal did not consider whether the trial judge's quantification of the damages was in fact an accurate reflection of the Messineo approach, but instead focused on his holding that the Messineo approach provided an exhaustive measure of those damages.

Zuber J.A. summarized the trial judgment at p. 88:

The learned trial judge was of the view that he was bound by the case of Messineo v. Beale [citations omitted] and that his award of damages was therefore limited to the difference between the contract price and the market value of what was received.

Zuber J.A. expressly held that Messineo was not authority for the broad proposition that the trial judge had taken from the case. After summarizing the holding in Messineo, Zuber J.A. said at p. 88:

It appears that in many of the cases, as a matter of fact, the damages amount to no more than the difference between the purchase price and the market value of what is received, but I find no case binding on this Court compelling the acceptance of such a measure as a rule of law.

Zuber J.A. then went on to consider whether the additional damages claimed by the plaintiffs, which his Lordship referred to as "consequential losses", were a reasonably foreseeable result of the solicitor's breach of his duty. Zuber J.A., joined by Goodman J.A., held that certain losses relating to the operation of the farm were reasonably foreseeable, but that losses relating to the Kienzles' inability to purchase another farm were not reasonably foreseeable. Justice Wilson disagreed and regarded both losses as reasonably foreseeable and therefore recoverable.

With respect to the contrary view, I do not regard Kienzle as a departure from Messineo. As indicated above, the two cases demonstrate that the initial measure of damages will depend in part on the nature of the solicitor's error. If the error caused the client to lose an interest in property he or she otherwise would have had, Kienzle is the appropriate starting point. If the error did not cause the client to lose an interest in property, but instead caused the client to enter into a transaction he or she would otherwise not have entered into, then Messineo is the appropriate starting point in the assessment of the client's damages. Further, as the Court of Appeal in Kienzle indicates, even where Messineo is the appropriate starting point, that measure of damages does not necessarily exhaust the client's claim. Consequential damages are recoverable if they were reasonably foreseeable. The Court of Appeal judgments in Messineo and Kienzle work together to describe the client's measure of damages. Messineo addresses the loss suffered by the initial overpayment, and Kienzle speaks to the solicitor's liability for reasonably foreseeable consequential losses caused by the solicitor's negligence and occurring subsequent to the ill-advised purchase. There are consequential damages in this case and I will address those later in these reasons.

[...]

C. Consequential damages

It was reasonably foreseeable that the clients would seek legal advice upon learning of Mr. Solway's error. They needed legal assistance in untangling themselves from the mess created by Mr. Solway's negligence. The clients are entitled to be compensated for the cost of that legal advice: Kienzle v. Stringer, supra, at p. 87.

The clients obtained legal advice. That advice, entirely consistent with the position taken by Mr. Solway and counsel for his insurers, was to contest the validity of the option. The contest led to litigation which was not ultimately resolved until 1987. In my opinion, the clients are entitled to be compensated for their own legal costs associated with retaining new counsel and challenging the validity of the option. Compensation in this context must mean full indemnification for all reasonable fees and disbursements. In so holding, I observe that no issue was taken with respect to the reasonableness of the conduct of the new solicitors in respect of their efforts to challenge the validity of the lease.

Given the way the parties advanced their respective claims before the trial judge, that amount is not quantified in the trial record. I do not think that this should deny the clients their right to recover that amount. I would hope that the parties could agree on the costs of those services. If they cannot, I would direct that the assessment officer determine those costs.

The clients' consequential damages do not stop with the indemnification for the costs associated with their new lawyer's attempts to extract the clients from the problem created by Mr. Solway's negligence. As is to be expected, the clients followed that advice, and that too cost them money. In my view, it was reasonably foreseeable not only that the clients would seek out new legal advice, but that they would follow any reasonable advice given to them by their new lawyers. Mr. Solway can hardly challenge the reasonableness of that advice here since the advice and the steps taken pursuant to that advice were entirely consistent with the position he and the lawyers for his insurer took between 1981 and 1987.

As a result of following their new lawyer's advice, the clients eventually became liable, as part of the settlement with the option holder, to pay some of the costs incurred by the option holder in advancing its claim with respect to the option. These costs were a direct product of following the advice given by the new lawyers and were a reasonably foreseeable consequence of Mr. Solway's breach. The clients are entitled to recover that amount from Mr. Solway: Braid v. W.L. Highway & Sons (1964), 191 E.G. 433 (Q.B.); Moorcroft v. Doraty, supra, at p. 320.

The record does not disclose the actual amount of the option holders' legal fees paid by the clients although it consists of some part of the $40,000 paid to the option holder on account of interest and legal fees. I would hope that the parties can agree on what part of that $40,000 constituted legal fees. If they cannot, I would refer this matter to the assessment officer.

By following the advice given to them by their new lawyers, the clients incurred one further monetary loss. Because the clients challenged the validity of the lease, the status of the property was uncertain in August of 1984 when the five-year lease expired. This uncertainty scuppered arrangements the clients had made to lease the property after the five-year lease expired. As a result, the property was vacant for several months and the clients incurred expenses in the amount of $39,422.57. As it was reasonably foreseeable that the clients would follow the reasonable legal advice given to them by their new lawyers, and as the expenses associated with maintaining the vacant property were a direct result of following that advice, I would hold that these too constituted consequential damages properly payable to the clients by Mr. Solway. I would also allow prejudgment interest on this amount as described by Galligan J.A. in his reasons.

In Kalish v. Rosenbaum, 2009 CanLII 70995 (ON SC), the defendant solicitor acted for the plaintiff vendors in the sale of a residential property, and in doing so breached his duty to advise his clients that there was a substantial risk that a badly drafted right-of-way would lead to disputes with purchasers.

Code J. held that the law is clear that legal costs, including the costs of litigation reasonably incurred to extract the client from the situation caused by a negligent solicitor, are recoverable as consequential damages:

[65] The second head of damages is the litigation costs incurred by the Kalishes after disputes arose over the Part 7 parking spot in the garage. There can be no serious issue that the litigation with the Madden purchasers was a direct result of the defendant's breach of his duty. Had he protected his clients' interests by amending and clarifying the badly drafted "right-of-way", these disputes would never have arisen. The law is clear that legal costs, including the costs of litigation reasonably incurred to extract the client from the situation caused by a negligent solicitor, are recoverable as consequential damages. Doherty J.A., Laskin J.A. concurring, made this clear in Toronto Industrial Leaseholds Ltd. v. Posesorski (1994), 1994 CanLII 7199 (ON CA), 21 O.R. (3d) 1, [1994] O.J. No. 2691, 119 D.L.R. (4th) 193 (C.A.), at paras. 102-105:

It was reasonably foreseeable that the clients would seek legal advice upon learning of Mr. Solway's error. They needed legal assistance in untangling themselves from the mess created by Mr. Solway's negligence. The clients are entitled to be compensated for the cost of that legal advice: Kienzle v. Stringer, supra, at p. 87.

The clients obtained legal advice. That advice, entirely consistent with the position taken by Mr. Solway and counsel for his insurers, was to contest the validity of the option. The contest led to litigation which was not ultimately resolved until 1987. In my opinion, the clients are entitled to be compensated for their own legal costs associated with retaining new counsel and challenging the validity of the option. Compensation in this context must mean full indemnification for all reasonable fees and disbursements. In so holding, I observe that no issue was taken with respect to the reasonableness of the conduct of the new solicitors in respect of their efforts to challenge the validity of the lease.

Given the way the parties advanced their respective claims before the trial judge, that amount is not quantified in the trial record. I do not think that this should deny the clients their right to recover that amount. I would hope that the parties could agree on the costs of those services. If they cannot, I would direct that the assessment officer determine those costs. [page187]

The clients' consequential damages do not stop with the indemnification for the costs associated with their new lawyer's attempts to extract the clients from the problem created by Mr. Solway's negligence. As is to be expected, the clients followed that advice, and that too cost them money. In my view, it was reasonably foreseeable not only that the clients would seek out new legal advice, but that they would follow any reasonable advice given to them by their new lawyers. Mr. Solway can hardly challenge the reasonableness of that advice here since the advice and the steps taken pursuant to that advice were entirely consistent with the position he and the lawyers for his insurer took between 1981 and 1987. Also see Kienzle v. Stringer (1981), 1981 CanLII 1851 (ON CA), 35 O.R. (2d) 85, [198

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