BC Supreme Court rejects husband’s claim against wife’s counsel over family home sale proceeds

Counsel has no duty to invest the funds into a separate interest-bearing trust account: court

BC Supreme Court rejects husband’s claim against wife’s counsel over family home sale proceeds

In a recent family law case, the BC Supreme Court declared that the wife’s counsel has no fiduciary duty or obligation to invest the funds from the sale of the family home into a separate interest-bearing trust account (SIBTA).

The parties were married in 2002 in Brazil and separated in 2020, but continued living together in Surrey, BC until their home was sold. They have two daughters, aged 15 and 12, who reside equally with both parents.

The husband sought a declaration that the wife and her counsel, Merle Campbell, failed to set up a SIBTA for $367,665.43 from the sale of the family home, which was instead held in Campbell’s general trust account. The husband requested the court order Campbell and the wife to pay him $18,057.41 plus interest and costs.

The family home sold on November 3, 2021, for $1,315,000. The wife's former counsel held the net proceeds in a pooled trust account until June 16, 2022. When the wife changed counsel, his new lawyer, Michael Hittrich, requested the funds be transferred to his trust account and later to an interest-bearing account.

Despite this request, the funds remained in Campbell’s pooled trust account. It was not until July 28, 2023, that the wife was alerted to this fact. The wife argued that significant interest was lost due to this oversight.

The Supreme Court found no evidence that Campbell owed a fiduciary duty to the wife or that she undertook to invest the proceeds in a SIBTA. The court noted that lawyers typically do not owe a duty of care to adverse parties, and no court order or authority suggested Campbell had an enhanced duty to invest the sale proceeds in a SIBTA.

The court highlighted that Campbell had safeguarded the funds in her pooled trust account, complying with her professional obligations and the Law Society of BC rules. Her client, the respondent wife, did not instruct her to move the funds into an SIBTA, and the court found it unreasonable to hold Campbell to a standard akin to that of a financial investment specialist.

Ultimately, the BC Supreme Court dismissed the husband’s application, finding no fiduciary duty or obligation for Campbell or the wife to invest the funds in a SIBTA.

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