Legal Question in Real Estate Law in Canada

Third Party Liability

Is a Lawyer liable for damages to a third party if, the third party provided funds directly to the lawyer and not through the lawyers client (based on the following information)? The funds were to be used to purchase real estate that the Lawyers client intended to develop. The third party did not receive any form of security from the Lawyer, the lawyer released the funds and the lawyers client lost the property to another mortgage holder. The third party did not produce and was not presented with any authorisation for release of the funds.

Is there any case law referencing this issue?


Asked on 2/10/04, 6:36 pm

1 Answer from Attorneys
Robert Maguire Maguire & Company

Re: Third Party Liability

The answer to this question would require more specific detail. In general the lawyer's undivided duty is to his/her client. However, if the lawyer receives funds from a third party under some express or implied agreement or undertaking (for e.g. that the lawyer will not release the funds until certain conditions are met) then the lawyer could be liable if he breached the conditions or undertaking. Your fact pattern raises the question as to why the funds were released by the lawyer.

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Answered on 2/19/04, 7:38 pm


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