The appellant law firm sued the respondent lawyer for damages resulting from the respondent's breach of an undertaking to protect the appellant's account.
The trial judge found that the respondent breached the undertaking but dismissed the claim, finding the breach did not cause the appellant's loss, and awarded costs to the respondent.
On appeal, the Divisional Court upheld the dismissal on the merits, finding no palpable and overriding error in the trial judge's causation analysis.
However, the Court allowed the appeal on costs, holding that the trial judge erred in principle by awarding costs to a solicitor who breached an undertaking, as such conduct reflects adversely on the administration of justice.
The trial costs order was reversed to no costs.