London Loan & Savings Co. of Canada v. Brickenden

London Loan & Savings Co. of Canada v. Brickenden

Majority held Brickenden breached his duty by deriving benefits from the loan without proper disclosure; the lending company is entitled to be placed as nearly as possible in the position it would have occupied but for the breach (full measure of loss), with a variation deducting the $1,000 bonus retained and reducing the contractual mortgage interest to the legal rate (5%) for damages calculation; repayment carries right of subrogation upon payment.

Citation
[1933] SCR 257
Parties
Appellant (plaintiff by Counterclaim): The London Loan and Savings Company of Canada; Respondent (defendant by Counterclaim): G.A.P. Brickenden; Original Plaintiffs / Borrowers: Walter H. Biggs et al.
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
29 March 1933
Procedural Posture
Appeal to Supreme Court of Canada / On Appeal From the Appellate Division of the Supreme Court of Ontario
Outcome
Appeal allowed with costs; judgment of trial judge restored with variation
Legal Topics
Conflict of Interest, Breach of Fiduciary Duty, Solicitor Client Transactions, Measure of Damages, Subrogation
Source Language
English
Professional Law Equity Trusts Property Conflict of Interest Breach of Fiduciary Duty Solicitor Client Transactions Measure of Damages +1 more

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Parties

The London Loan and Savings Company of Canada

Appellant (plaintiff by Counterclaim)

G.A.P. Brickenden

Respondent (defendant by Counterclaim)

Walter H. Biggs et al.

Original Plaintiffs / Borrowers

Procedural Posture

Appeal to Supreme Court of Canada / On Appeal From the Appellate Division of the Supreme Court of Ontario

Legal Issues

  1. 1 Whether a solicitor who takes a benefit from a loan involving his client breaches his duty to the lending client
  2. 2 On whom rests the onus of proving full disclosure and independent advice in solicitor-client benefit transactions
  3. 3 Appropriate measure of damages for breach by a solicitor (full loss vs. amount actually received)

Ratio Decidendi

Majority held Brickenden breached his duty by deriving benefits from the loan without proper disclosure; the lending company is entitled to be placed as nearly as possible in the position it would have occupied but for the breach (full measure of loss), with a variation deducting the $1,000 bonus retained and reducing the contractual mortgage interest to the legal rate (5%) for damages calculation; repayment carries right of subrogation upon payment.

Court Disposition

Appeal allowed with costs; judgment of trial judge restored with variation

Orders

  • Appeal allowed and judgment of Raney J. restored with variation as set out by Smith J.
  • Reference back to the trial court to recalculate amount payable by deducting $1,000 from the principal and calculating interest at 5% instead of 8%.