A Quebec court has dismissed a suit that was seeking to hold a lawyer responsible for losses caused by convicted fraudster, Earl Jones, after he referred a client to Jones to help administer an estate, which lost over $400,000 as a result.
A judge in Superior Court, district of Montreal, dismissed a suit brought by the liquidator of an estate that was lost to Jones. The plaintiffs sued Kenneth Salomon, a lawyer who was retained by the liquidator of the estate in 2007.
According to the decision, the lawyer advised the liquidator that the estate could save money by hiring someone to perform the administrative duties of handling the estate, and he recommended Earl Jones, who took on that role shortly after. However, when he was arrested in 2009, it was discovered that the money in the estate that he handled was gone; this included a life insurance payout of more than $300,000 and over $100,000 in RRSPs.
“This is a tragic situation, since the heirs to the estate are two young adult men who are mentally handicapped,” the judgment notes.
The suit sought to hold the lawyer responsible for the losses for recommending Jones in the first place. However, the court denied the claim, ruling that he could not have known of the illegal activities until they were uncovered in 2009; and, that he did not guarantee the work to be performed by Jones. It also said that it could not accept the plaintiff’s argument that the lawyer had a duty to verify the banking arrangements, and to make sure that the money collected was put in a separate account.
The court also ruled that the lawyer did not instruct the liquidator to send the estate funds to Jones. It says that the liquidator did this, believing that Jones had opened an account to manage the estate’s affairs. “The liquidator, like many others, believed Mr. Jones to be an honest person who would act responsibly,” it says; finding that the lawyer was not at fault.
The estate’s heirs will be making some recovery of their lost funds, the decision indicates; reporting that they will be receiving $122,582 as a result of a class action suit against RBC in relation to Jones’ “trust” accounts; and, that Jones’ bankruptcy proceedings generated another $31,800 for them. “These amounts are however less than half the amounts that were entrusted to Mr. Jones,” it notes.