BDO Canada LLP

The decision concerns an application by Sherif Gerges Pharmacy Professional Corporation and Sherif Gerges for the appointment of an inspector under the Ontario Business Corporations Act to investigate the business and financial affairs of Seva Drug Mart Inc. and Eglinton Drugs Inc., as well as for leave to bring derivative actions on behalf of those corporations and Woodbine Downs Healthcare Realty Inc. The court granted the appointment of an inspector and leave to bring the proposed actions, rejecting the respondents' arguments that arbitration provisions applied and that certain claims were statute-barred.

The court also addressed the allocation of costs for the investigation and the proposed actions.

The plaintiff credit union, in liquidation, brought a motion for partial summary judgment against its insurer under a fidelity bond.

The claim arose from an internal fraud perpetrated by the credit union's general manager, who engaged in an off-book deposit scheme that disguised a significant capital shortfall.

The insurer denied coverage, arguing that the plaintiff failed to prove a direct loss caused by the dishonest acts and that the losses were indirect or consequential.

The court dismissed the motion, finding that the complex forensic accounting evidence required viva voce testimony and cross-examination at trial to determine causation and quantify the covered loss.