2 total
Negligence claim against auditor held statute-barred under discoverability standard.
The appellant auditors sought to have the respondent province's negligence claim dismissed as statute-barred under a two-year limitation period.
The province had paid out $50 million in loan guarantees in reliance on the appellants' audit report, and later received a second firm's draft report revealing material misstatements in the audited financial statements.
The Court established that a claim is discovered when the plaintiff has actual or constructive knowledge of the material facts upon which a plausible inference of liability on the defendant's part can be drawn.
Applying this standard, the Court found the province discovered its claim when it received the draft report from the second firm, more than two years before commencing its action.
The appeals were allowed and the motions judge's summary judgment dismissing the province's claim as statute-barred was restored.
Action stayed; defendant did not carry on business in Ontario.
The defendant brought a motion to stay or dismiss an Ontario action for lack of jurisdiction.
The plaintiffs sought contribution and indemnity from the defendant in relation to a large American judgment arising from their lottery resale business.
Applying the real and substantial connection test clarified in Club Resorts Ltd. v. Van Breda, the court considered whether the defendant carried on business in Ontario.
The court found that the defendant’s indirect relationship with the plaintiffs through an authorized retailer in Prince Edward Island, a single audit visit, and termination of a retailer agreement did not establish that the defendant carried on business in Ontario.
The motion was granted and the action stayed for lack of jurisdiction.
