The appellant insurer denied coverage to a corporate policyholder that suffered losses arising from a phishing scheme in which funds were fraudulently transferred from the policyholder's bank account, which included a line of credit.
The insurer argued that the transferred funds belonged to the bank rather than to the policyholder, as the funds came entirely from the line of credit.
The Quebec Court of Appeal held that the loss was covered by the insurance policy because the policyholder was the owner of the transferred funds.
The Supreme Court of Canada unanimously affirmed the Court of Appeal's decision, dismissing the appeal.
The Court further clarified that the result would not have differed even had the policyholder's account been in positive balance.
