Acting For Spouses With Respect To The Sale Of A Matrimonial Home Where The Spouses Are Involved In A Matrimonial Dispute

A lawyer who represents one of the spouses in a matrimonial dispute should not act for
both spouses with respect to the sale of the matrimonial home because of the potential
for a serious conflict of interest developing.

A lawyer who acts for both spouses with respect to the sale of the matrimonial home is
acting on a joint retainer and must comply with subrules 2.04(6) -(10). When a lawyer is
retained on a joint retainer, no information received in connection with the matter from
one client can be treated as confidential as far as any of the other clients in the joint
retainer are concerned. In such a situation the lawyer has a fiduciary duty to protect both
clients and to disclose all relevant information to both clients.

Furthermore, if the lawyer is acting for both parties and a dispute arises between the
parties as to the manner in which the closing proceeds are to be distributed, the lawyer
may not distribute the proceeds in a manner inconsistent with the instructions of both of
the parties. The lawyer cannot prefer the interests of one client over the other. In such a
situation, the lawyer should not pay out any portion of the proceeds without the written
consent of both spouses or without a court order. See Rule 2.04 on Avoidance of
Conflicts of Interest.

MORTGAGES

There are a number of Rules, By-Laws and Guidelines dealing specifically with mortgage or loan transactions. These provisions assist lawyers to fulfill their fiduciary
obligations to their clients and to manage risk.

ACTING FOR A BORROWER AND A LENDER IN A MORTGAGE OR LOAN
TRANSACTION

A lawyer or two or more lawyers practicing in partnership or association are permitted to
act for both a borrower and a lender in a mortgage or loan transaction only in the
following circumstances:

• the lawyer practises in a remote location where there are no other lawyers thateither party could conveniently retain for the transaction; 
• the mortgage is a vendor take back mortgage;
• the lender is a bank, trust company, insurance company, credit union or finance company that lends money in the ordinary course of its business;
• the consideration for the mortgage or loan does not exceed $50,000.00;
• the lender and borrower are not at arms length as defined in the Income Tax Act (Canada).

 DISCHARGES OF MORTGAGES

The recommended procedure for discharging mortgages is contained in a guideline
developed by the Law Society in 1992. Although the guideline is dated 1992, it
continues to remain relevant. While compliance with the guideline is not mandatory, the guideline does aim at risk management and promotes competence.