Acting for Alberta law firm, BD&P, and a former partner of the firm, NST partner James Parker and associate Cindy Chen successfully opposed an appeal dealing with the Adams rule regarding third party claims: Grant Thornton LLP v. Interior Equities Corp., 2025 BCCA 299
Underlying Action
In the underlying action, a former client of BD&P brought a negligence claim against it relating to a real estate development limited partnership. The former client was the general partner of the limited partnership. BD&P brought a third party claim for contribution and indemnity against Grant Thornton alleging that it had been negligent in its role as the accountant for the general partner. Grant Thornton applied to strike the third party claim on the basis of the Adams rule, which holds that a third party claim alleging negligence against the third party that is attributable to the plaintiff is unnecessary because the allegations can be raised directly against the plaintiff as a defence. In the Supreme Court, the chambers judge dismissed Grant Thornton’s application finding that it was not obvious that the alleged negligence of Grant Thornton was attributable to the general partner.
Reasons on Appeal
On appeal, Grant Thornton argued that the chambers judge had erred by failing to appreciate the broad scope of the Adams rule in respect of professionals acting within the scope of their retainers for a client, including by failing to recognize that professional advisors, such as lawyers and accountants, are always agents for their clients. The Court of Appeal dismissed the appeal. The Court’s reasons represent a shift away from the broader analysis in the previous major decision on the Adams rule in Laidar Holdings Ltd. v. Lindt & Sprungli (Canada) Inc., 2012 BCCA 22. In this Grant Thornton decision, the Court of Appeal has arguably narrowed the scope of the Adams rule to be applicable to proposed third parties who are agents within the classic formulation of the law of agency, as opposed to “agents” in the colloquial sense of someone who acts on behalf of another.
