COURT OF APPEAL FOR ONTARIO

CITATION: K & L Multi Trades Inc. v. Bank of Nova Scotia, 2012 ONCA 180

DATE: 20120321

DOCKET: C54493

MacPherson and Juriansz JJ.A., and Pattillo J. (ad hoc)

BETWEEN

K & L Multi Trades Inc. and 1466662 Ontario Inc. Carrying on business under the firm name and style K & L Multi-Trades and Brendan Loder

Plaintiff (Appellant)

and

The Bank of Nova Scotia

Defendant (Respondent)

Patrick DiMonte, for the appellant

Brendan Wong, for the respondent

Heard and released orally: March 19, 2012

On appeal from the judgment of Justice Mark L. Edwards of the Superior Court of Justice, dated September 27, 2011.

ENDORSEMENT

[1] The appellant Brendan Loder appeals from the judgment of Edwards J. of the Superior Court of Justice dated September 27, 2011. In his judgment, the motion judge struck out Loder’s Statement of Claim for failure to disclose a reasonable cause of action and dismissed Loder’s motion for leave to amend his claim on the ground that it too disclosed no cause of action.

[2] The appellant contends that the motion judge erred by not allowing him to amend his statement of claim to plead that as a guarantor, indemnifier or surety of the obligations of the corporation of which he was a shareholder, he had the right to assert a claim against the bank for negligence.

[3] We do not agree with this submission. As the motion judge correctly pointed out, Loder does not allege that he guaranteed the corporation’s obligations to the respondent bank. Rather, Loder’s claim is based on his becoming indebted to third parties other than the bank, including Canada Revenue Agency. Any obligations to the corporation’s creditors arise independent of the bank. Thus, there is simply no lis between Loder and the bank.

[4] We also agree with the motion judge’s conclusion that Loder’s potential claim is derivative of the corporation’s claim and should therefore only be asserted by the corporation. The motion judge’s application of this court’s decision in Walters v. Royal Bank of Canada, 2000 CanLII 5668 (ON CA), [2000] O.J. No. 702, was correct.

[5] The appeal is dismissed. Costs to the respondent fixed at $4000 inclusive of disbursements and HST.

“J.C. MacPherson J.A.”

“R.G. Juriansz J.A.”

“L.A. Pattillo J. (ad hoc)”