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Lawyers must act with care and uphold their professional obligations when making referrals. The Supreme Court of Canada recently addressed the professional liability of a lawyer who advised his client to purchase specific offshore investments from an advisor where that advisor turned out to be a fraudster. In Salomon v Matte‑Thompson, 2019 SCC 14, the Supreme Court upheld the decision of the Quebec Court of Appeal holding the lawyer liable for his client’s investment losses.…
Continue Reading Supreme Court Confirms that Lawyer is Liable for Advising Clients to Invest in Fraudulent Scheme

Surprisingly, evidently not. Briefly the facts in Plate v. Atlas Copco Canada Inc., 2019 ONCA 196: an Executive in the role of Vice President Global Strategic Customers was terminated for just cause grounded in a decades-long defrauding of the company and its benefits provider in conspiracy with the latter’s consultant, to the extent of over $20,000,000, over a million of which resulted to the Executive personally. His argument that he was a bystander incidentally enriched to the knowledge of the employer failed, conviction entered, no appeal pursued.…
Continue Reading Tangled Weeds: Fiduciary Status in a Criminal Fraud Not Determinative in Employment Litigation?

When a plaintiff obtains a judgment from the court, that party is normally precluded from starting another lawsuit seeking the same judgment debt from the defendant. However, in Royal Bank of Canada v Kim, 2019 ONSC 798, Justice Broad of the Ontario Superior Court made an exception because the bank had discovered evidence of fraud after it obtained summary judgment against the defendant. The bank sought to pursue a second action for a judgment in fraud so that the judgment would survive and be enforceable after the bankruptcy of the defendant who, in turn,  vigorously resisted the second action arguing that  the plaintiff had already obtained judgment against him and could not reconstitute the judgment after the fact.…
Continue Reading Bank allowed to allege fraud in second ‘Kick at the Can’

On November 15, 2018, the Supreme Court of Canada granted Christine DeJong Medicine Professional Corporation’s (“DeJong”) application for leave to appeal from the decision in DBDC Spadina Ltd. v. Walton, 2018 ONCA 60. By granting leave, Canada’s highest court will weigh in on the liability of “victims” of fraud as against one another.…
Continue Reading Supreme Court to Rule on Conflicting Rights of Investors in Fraudulent Schemes

Piercing the corporate veil remains a difficult feat in Ontario. Recently, in Cornerstone Properties v Southside Construction, Justice Hockin of the Ontario Superior Court of Justice refused to pierce the corporate veil to hold a corporation liable for a costs award against its subsidiary. This decision reaffirms that courts will only pierce the veil where a corporation is being abused to the point where it is not functioning as a bona fide corporate entity, and instead is being used as a vehicle to facilitate fraudulent or improper conduct.…
Continue Reading Piercing the Corporate Veil – the Need for Clear Fraudulent or Improper Conduct