Lincoln Caylor

Following a trial where the plaintiff university successfully proved that the defendants engaged in fraudulent activities and breached their fiduciary duties, the parties could not agree on costs.

The court awarded the plaintiff full indemnity costs against the primary defendants who orchestrated the fraud, and partial indemnity costs against the defendants involved only in fraudulent conveyances.

No costs were awarded for earlier motions due to divided success.

The plaintiff university brought an action against its former Assistant Vice-President and Director of Maintenance, alleging they orchestrated multiple fraudulent schemes, including false invoicing, kickbacks, and using university resources for personal residence improvements.

The court found the defendants liable for fraud and breach of fiduciary duty, ordering them to pay damages.

The court also voided the transfer of the primary defendant's properties to his family members as fraudulent conveyances and rescinded his severance agreement due to material non-disclosure of his fraudulent activities.

Following dismissal of the defendant bank’s summary judgment motion asserting a limitations defence, the plaintiffs sought partial indemnity costs of $635,000.

The action arises from a massive Ponzi scheme involving certificates of deposit issued by an offshore bank, with the plaintiffs acting as joint liquidators pursuing damages of USD $5.5 billion against the defendant bank as correspondent banker.

The court held that although the plaintiffs were successful in resisting the motion, their claimed costs were excessive and far outside the reasonable expectations of the unsuccessful party for a two‑day summary judgment motion.

Considering the factors under Rule 57.01(1), the court fixed a fair and reasonable costs award of $120,000 all‑inclusive on a partial indemnity basis.

The award was made without prejudice to the plaintiffs’ ability to seek additional costs related to the motion at trial where the limitations issue remains live.

The defendant bank brought a summary judgment motion seeking dismissal of a $5.5 billion negligence and knowing assistance claim arising from an international Ponzi scheme, arguing the action was barred by the two‑year limitation period under the Limitations Act, 2002.

The claim was brought by joint liquidators of an offshore bank alleging the defendant bank failed to exercise appropriate due diligence and facilitated the scheme by continuing correspondent banking services.

The court held that the discoverability of the claim before the critical limitation date involved complex factual inquiries regarding what the liquidators’ predecessors knew or ought to have known about the bank’s role in the fraud.

Given the extensive evidence, overlapping merits issues, and disputed factual questions about knowledge and investigation during the liquidation process, the court found a genuine issue requiring a trial.

Summary judgment was therefore inappropriate.

The appellant appealed an order extending a Mareva injunction that froze its shares in a Toronto-based company.

The injunction was originally granted ex parte to secure an international arbitration award against the Kyrgyz Republic.

On appeal, fresh evidence was admitted showing the underlying arbitral award had been set aside by a Russian court.

The Divisional Court allowed the appeal and set aside the injunction on the basis of the fresh evidence.

The Court also found that the respondent had breached its duty of full and frank disclosure on the original ex parte motion by failing to disclose material facts regarding a foreign court's ruling on the arbitral tribunal's lack of jurisdiction.

The respondents brought a motion to quash the appellant bank's appeal from an order granting leave to amend a statement of claim.

The respondents argued the order was interlocutory, meaning the appeal should lie to the Divisional Court.

The Court of Appeal agreed, finding that the order permitting the amendment did not deprive the appellant of a substantive defence but simply allowed the matter to proceed to trial.

The appeal was quashed.

The respondent, Kyrgyzaltyn JSC, sought leave to appeal an order continuing an ex parte Mareva injunction obtained by Stans Energy Corp. The moving party argued that Stans Energy Corp. failed to disclose material information, specifically an English translation of a foreign court decision questioning the jurisdiction of the arbitration tribunal that issued the underlying award.

The Divisional Court granted leave to appeal the continuation of the injunction, finding conflicting decisions on the test for materiality of non-disclosure on ex parte motions and determining that the issue was of sufficient importance to warrant appellate review.

Leave to appeal the specific terms requiring a third party to hold dividends in trust was refused.

Investors who lost $17 million in a fraudulent certificate of deposit scheme brought a motion for leave to amend their statement of claim against a bank that had acted as a correspondent bank for the fraudster.

Earlier pleadings alleging a general duty on banks to monitor customers for fraud had been struck for failing to disclose a reasonable cause of action.

The proposed amendments added detailed allegations based on documents obtained by liquidators showing internal concerns within the bank about suspicious activities and regulatory issues surrounding the customer.

The court held that the amended pleading alleged a more specific duty arising from particular knowledge and circumstances rather than a broad duty to investigate customers generally.

Because the new allegations relied on information not reasonably available earlier and could potentially support a tenable claim, leave to amend was granted.

The appellant appealed an order discharging a Certificate of Pending Litigation (CPL) and a limited proprietary injunction, which allowed the respondent to sell or encumber a property to fund legal defence costs for herself and her parents.

The appellant argued the motions judge erred in assessing its fraudulent conveyance and resulting trust claims, and in allowing the property's equity to fund the father's legal fees.

The Divisional Court dismissed the appeal, finding no legal error in the motions judge's assessment of the claims and no palpable or overriding error in his exercise of discretion to ensure the defendants had access to legal representation.

The plaintiff, York University, sought leave to appeal an order discharging a certificate of pending litigation on a property and authorizing its sale or mortgage to fund the defendants' legal representation.

The Divisional Court granted leave to appeal, finding good reason to doubt the correctness of the motion judge's assessment of the equities, particularly the consideration of the personal circumstances of a non-owner defendant in a fraudulent conveyance claim.

The court also noted the importance of clarifying the legal principles for discharging such certificates to guide future cases.

An employee of the appellant hospital defrauded his employer by causing it to issue cheques to a made-up entity for services never rendered.

The cheques were deposited by an accomplice at the respondent bank.

The hospital sued the bank for conversion.

The Court of Appeal upheld the motion judge's finding that the made-up entity was a 'non-existing person' under s. 20(5) of the Bills of Exchange Act, which allowed the bank to treat the cheques as payable to bearer and provided a complete defence to the conversion claim.

The appellants appealed an order striking out portions of their statement of claim.

The struck portions alleged that the respondent bank owed a duty of care to the appellants, who were not its customers, to inquire into its customer's activities to ensure the accounts were not used for fraudulent purposes.

The Court of Appeal dismissed the appeal, agreeing with the motion judge that the facts pleaded did not give rise to a recognized duty of care, nor did they warrant recognizing a new duty of care under the Anns/Kamloops principles.

The appellant appealed a motion judge's order finding that Ontario had jurisdiction over the action and was the more convenient forum.

The Court of Appeal upheld the motion judge's application of the real and substantial connection test from Muscutt v. Courcelles.

The Court also found no error in the motion judge's weighing of factors, including the location of witnesses and avoidance of multiplicity of proceedings, to conclude that Ontario was the more convenient forum.

The appeal was dismissed with costs.

The appellant appealed an order of the Superior Court of Justice regarding the interpretation of an insurance policy.

The Court of Appeal found no error in the motion judge's analysis and conclusion.

The appeal was dismissed with costs fixed at $7,500.