Court awards damages against law firm in the amount of $45 million for breach of breach of contract and professional negligence

Last week, an Ontario Superior Court judge awarded damages against Cassels Brock in the amount of $45 million for breach of fiduciary duty, breach of contract, and professional negligence.

In his 160-page decision issued July 8 in Trillium Motor World Ltd. V. General Motors of Canada Ltd., Justice Thomas McEwen found that Cassels Brock owed contractual and fiduciary duties to some or all of the class members in the case and breached those duties. As well, he found it also owed a duty of care, which was also breached.

McEwen wrote: “I find that Cassels was retained by the Class Members including Trillium to protect their interests in any complex restructuring of the dealer network and to represent them in any GMCL CCAA proceedings. I further find that Cassels breached its contractual and fiduciary duties by accepting the retainer having already agreed to act for the Federal Government (through Industry Canada) in relation to any GMCL CCAA proceedings. Cassels knew about this conflict from the outset; yet, rather than declining to act for the GMCL dealers and referring to an unconflicted law firm, or even telling the dealers about the retainer with the Federal Government, continued to act for both the Federal Government and the dealers.”

McEwen also determined GM Canada did not breach the Arthur Wishart Act (franchise disclosure), 2000. Therefore he dismissed the action against GMCL. He also dismissed the counterclaim by GMCL against each of the class members.