On April 14, 2011, the Quebec Superior Court rendered a 750-page decision in the matter of Widdrington v. Wightman et al, known as the "Castor" case, the longest-running judicial saga in Canadian legal history. The court found the accounting firm of Coopers & Lybrand (C&L) and one of its partners to have been negligent in auditing Castor Holdings Inc., preparing valuation letters and issuing “Legal for Life” certificates.
C&L has appealed this decision before the Quebec Court of Appeal, filing a 139-page inscription in appeal on May 13, 2011, basically setting out that the judge in first instance erred in several aspects of her decision, namely, in her analysis of the rules applicable to the liability of auditors to third parties and on issues related to reliance on the financial statements. C&L is also critical of the judge’s management of the case and alleges several errors in law and in fact she committed, namely, regarding relevant standards and their application to the case. Finally, C&L raises issues relating to the assessment of damages and the attribution of costs and the additional indemnity.
Given that Widdrington has binding effect (on the common issues) for other court cases initiated as a result of the Castor failure, more than $1 billion in claims is at stake for C&L because of this adverse ruling. To be continued...
For more information, a summary of the decision in first instance is available.