The appellants (defendants), an accounting firm, appealed the dismissal of their motion for summary judgment.
The respondents (plaintiffs) had previously settled a fee dispute with the appellants and signed a mutual release.
Years later, the respondents discovered that a 'butterfly transaction' structured by the appellants resulted in a massive tax liability, and they sued for professional negligence.
The appellants argued the mutual release barred the claim.
The Divisional Court dismissed the appeal, finding that the negligence claim was unknown and not in the contemplation of the parties when the release was executed, and therefore the release did not bar the action.