What is the legal test for a solicitor to purchase a lease from his client?

However, where the allegation is that the solicitor is seeking to strike a bargain with a client (where a fiduciary relationship exists) the responsibilities that devolve upon that solicitor are quite strict’, and generally require him to make full disclosure, make certain the other party is completely aware of his rights and be certain that any contract reached is fair and reasonable so that there is no hint that the lawyer acquired an advantage over his client simply because of the influence and ascendancy that arises out of a layperson consulting an expert in the law. The statement of the law most referred to on this subject is that of Parker, J., in Allison v. Clayhille (1907-8), 97 L.T.R. 709, at p. 711: . . . Now, before going into the facts of the case, I think it might be well to state shortly what I conceive to be the law applicable in the case, of a purchase of a lease by a solicitor from his client. It appears to me to be quite clear that a solicitor is not wholly incapacitated from purchasing or taking a lease from his client, but, where the relationship of solicitor and client exists, the onus of upholding the vitality of such a transaction will rest upon the solicitor. It is, I think, equally clear that, although the relationship of solicitor and client in its strict sense has been discontinued, the same principle applies as long as the confidence natrually arising from such a relationship is proved or may be presumed to continue. There are cases in which it is laid down that this principle only applies when the solicitor is the solicitor of his client in the particular transaction the validity of which is in dispute; but, in my opinion, that only means that when the relationship is of such a nature that it does not impose on the solicitor any duty towards his client in the particular transaction, then the principle has no application. It does not mean, in my opinion, that the principle has no application in any case in which the solicitor is not in the particular transaction actually retained by or actually acting for his client under such circumstances that if he neglected his professional duty he would be liable to an action at law for negligence. Of course, if he be so retained and is so acting, there can be no question that the principle does apply, but, even if he be no longer so retained or acting, his duties in the contemplation of a court of equity may still be such as to throw upon him the onus of upholding the validity of a purchase or a lease from his client. In considering whether this onus lies upon him, the test appears to me to be the proper answer to the question whether in the particular transaction, he owes his client any duty in the contemplation of a court of equity. If he owes his client any duty in the particular transaction, the equal footing on which the parties to any bargain should stand is impaired or destroyed, and the solicitor is, I think, solicitor in hao re within the meaning of the decisions although not retained to act as solicitor in the transaction or, indeed, in any pending transaction at all. Thus, if a solicitor is actually engaged to conduct or is conducting for his client an action, say, for slander, and, while that action is pending, meets his client in the hunting field and bargains and buys from him a horse, each party relying upon his own knowledge of horseflesh, that transaction will stand on the same footing as a transaction between strangers, because the matter is entirely outside any confidential relationship between the parties, and the solicitor owes his client no duty whatever in the particular matter. On the other hand, if a solicitor has once been employed, say, to manage his client’s real estates, then, although the employment may have entirely ceased, yet there may still be a duty on the solicitor’s part towards his client -- for example, that of possibly advising or possibly communicating information which he has obtained while acting as solicitor -- and the existence of such a duty may bring the ordinary rule into operation and make the solicitor solicitor in hae Te if he subsequently purchased the real estates from his client, although as a matter of fact the relationship of solicitor and client in the strict sense had ceased to exist altogether. In considering whether in any particular transaction any duty exists such as to bring the ordinary rule into operation, all the circumstances of the individual case must be weighed and examined . . .