In 1169822 Ontario Ltd. v. Toronto-Dominion Bank 2018 ONSC 1631 Justice Dunphy of the Ontario Superior Court decided a case where investors in a failed Ponzi scheme sought recovery from the financial institution used by the fraudster to deposit funds.
The key takeaways from the case are:
- it confirms that a financial institution can be liable where it has actual knowledge (willful blindness or recklessness will also suffice) that a customer is using the accounts at the bank to committed a fraud against third parties; and
- constructive knowledge of the fraud was insufficient to establish a duty by the bank towards third parties.
In Esfahani v. Samimi, 2018 ONCA 516 the Ontario Court of Appeal confirmed that a plaintiff pursuing a fraudulent conveyance or preference must recognize that the legal landscapes changes with a bankruptcy and that the effects of a bankruptcy filing cannot be ignored. The unfortunate outcome for the plaintiff, Djalaleddin Esfahani (“Esfahani“), was that an otherwise valid claim to set aside a fraudulent conveyance was dismissed because it was brought outside of the bankruptcy process. Continue Reading
The general prohibition on false or misleading advertising under the Competition Act is somewhat unusual in that it contains two adjudicative regimes, criminal and civil, that can be used to address the same conduct – the making of a materially false or misleading representation to the public for the purpose of promoting one’s product or business interest. Continue Reading
Join Baker Mckenzie’s global practitioners on Thursday, June 14 for a Deferred Prosecution Agreement Roundtable to gain important insights on:
- The impact that Bill C-74 will have on corporate criminal law in Canada;
- How the Canadian DPA system (which will be known as the Remediation Agreement Regime) will work in practice and how it will impact the Integrity Regime;
- The critical lessons learned from negotiating DPAs in other jurisdictions;
- Strategies for self-disclosure and dealing with parallel multinational investigations, multiple enforcement agencies, and global settlement negotiations; and
- Designing compliance programs and conducting effective internal investigations to ensure your company qualifies for a DPA.
This is our third and final post on the complex fraud carried out by Norma and Ronald Walton, and the Ontario Court of Appeal decisions arising from their scheme. In our earlier posts, we focused on the use of a constructive trust as a remedy for breach of fiduciary duty and third party fraud liability. In this post, we discuss the risk that comes with bringing a summary judgment motion in the context of a complex fraud action. Continue Reading