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.
