The applicants, shareholders of TD Bank, sought leave under section 334 of the Bank Act to bring a derivative action in Delaware on behalf of TD Bank's U.S. subsidiary regarding anti-money laundering failures.
The court dismissed the application, finding that the Bank Act does not permit an Ontario court to grant leave for a derivative action to be commenced in a foreign jurisdiction.
Furthermore, the court held that even if it had jurisdiction, leave would not be granted because the proposed action did not appear to be in the best interests of the bank, given the board's reasonable business judgment and the potential prejudice to the bank in other ongoing litigation.
