David Andrew Hausman

The representative plaintiff in a proposed class proceeding sought to introduce a settlement agreement and reasons for decision from a prior Ontario Securities Commission (OSC) prosecution against the defendants.

The defendants appealed a motion judge's refusal to strike these documents from the plaintiff's affidavit, arguing they were protected by settlement privilege and inadmissible.

The Divisional Court dismissed the appeal regarding the settlement agreement and reasons, finding that the defendants waived privilege by entering a public regulatory settlement, which was tantamount to a guilty plea.

However, the court allowed the appeal in part to strike the statement of allegations, as mere allegations have no evidentiary value.

Appeal in a professional negligence action against an accountant arising from a review engagement for a retail business that failed to remit over $1 million in provincial retail sales tax.

The court held the accountant owed a duty to exercise reasonable skill and care and breached the applicable standard by failing to make intelligent inquiries about glaring discrepancies between sales and remittance figures, particularly given the client's prior audit history.

A contractual exclusion clause did not shield the accountant because it operated only where the review engagement was conducted in accordance with applicable standards.

The appellant could recover losses tied to penalty, assessed interest, and non-recoverable income tax consequences, but not post-assessment borrowing costs or professional fees; damages were reduced by 50 per cent for contributory negligence.