Court of Appeal for Ontario

Date: October 31, 2018 Docket: C65093

Judges: Doherty, van Rensburg and Hourigan JJ.A.

Between

Am-Stat Corporation Plaintiff (Appellant)

and

Her Majesty the Queen in Right of Ontario, and Minister of Government and Consumer Services Defendants (Respondent)

Counsel

R.B. Moldaver Q.C., for the appellant

A. Jin, for the respondent

Heard and released orally: October 29, 2018

On appeal from: the judgment of Justice Victoria R. Chiappetta of the Superior Court of Justice, dated March 8, 2018.

Reasons for Decision

[1] The appellant appeals the dismissal on a Rule 21 motion of its claim for negligence against Her Majesty the Queen in Right of Ontario ("HMQ").

[2] The appellant, a mortgage broker, was defrauded by George Nastevski, who claimed to be the sole owner and officer of Aldrogian Holdings Inc. Nastevski persuaded the appellant to advance $1.8 million in loans secured by mortgages on property owned by Aldrogian. In fact Nastevski had no affiliation with Aldrogian. The appellant claims that, in advancing the money it relied on a corporation profile report and other documents it obtained from the Ministry of Government and Consumer Services that incorrectly identified Nastevski as a director and officer of Aldrogian. In fact Nastevski, who had no relationship with Aldrogian, had filed a fraudulent notice of change to that effect.

[3] The claim against HMQ is for the appellant's loss "as a result of advances made pursuant to worthless mortgages taken by the [appellant] as a result of [HMQ's] negligence". The statement of claim alleges essentially that the Ministry owed a duty of care both to the public and in particular the appellant, to reasonably ensure the accuracy and reliability of the information it collected, maintained and disseminated for a fee, when the Ministry knew or ought to have known that the appellant would rely upon such information.

[4] The issue on this appeal is whether the motion judge erred in her application of the Anns/Cooper test when she concluded that there was no duty of care owed by the respondent to the appellant to ensure the accuracy of the information it collected and then provided upon the payment of a fee. The appellant says that the motion judge erred in law first, in failing to recognize a prima facie duty of care, and then in her conclusion that the recognition of such a duty would be against public policy.

[5] We reject the appellant's arguments. The appellant's claim against the respondent fails at the first stage of the Anns/Cooper test.

[6] As the motion judge noted, when the defendant is a public actor, a relationship of proximity giving rise to a prima facie duty of care may only arise explicitly or by implication from the language of the governing legislation or from the nature of the interactions between the parties. See R. v. Imperial Tobacco, 2011 SCC 42, at paras. 43-45; Cooper v. Hobart, 2001 SCC 79, at para. 43.

[7] We reject the appellant's assertion that because the Act does not expressly exclude a private law duty of care, it must exist. That is not the law.

[8] The governing legislation is the Corporations Information Act, R.S.O. 1990, c. C.39, which requires all corporations carrying on business in Ontario to file certain prescribed information and changes in information (including a record of officers and directors of the corporation). The corporation profile report reflects information on the public record for the subject corporation as of the date the report is ordered.

[9] There is nothing in the Act that points to an intention to create a private law duty of care on the part of the regulator to third parties to ensure the accuracy of information that is filed by or on behalf of corporations with the Ministry. Moreover, the language of the statute itself is inconsistent with the imposition of such a duty.

[10] Section 8 requires the Minister to enter into a record the information from every return and notice that is received under the Act. Section 21 provides specifically that "the Minister may accept the information contained in any return or notice filed under [the] Act without making any inquiry as to its completeness or accuracy". And the Minister's certificate contemplated by s. 19 cannot address the accuracy of the information in the Ministry's files but is limited to certifying that the information set out in that section has or has not been filed.

[11] The appellant asserts that because HMQ has the discretion not to publish the information it receives, once it decides to make the information public, it undertakes a duty to ensure its accuracy. There is no such discretion. Section 10 provides for a right of public access to the information that is filed and maintained by the Ministry upon payment of the prescribed fee.

[12] We agree with the motion judge's conclusion that reliance by third parties on the information accepted by the Ministry is not contemplated by the Act.

[13] Second, the motion judge did not err in finding that the payment of a fee in exchange for access to the public corporate record, was insufficient to constitute a direct interaction giving rise to proximity. There is no rule that the payment of a fee automatically imposes a private law duty of care by a payee to a payor. The appellant has pointed to no case authority in support of its submission that the payment of a fee in and of itself creates a relationship that gives rise to a prima facie duty of care.

[14] For these reasons we agree with the motion judge that it is plain and obvious the claim cannot succeed. Therefore we dismiss the appeal. Costs to the respondent in the agreed amount of $2,000, inclusive of HST and disbursements.

Doherty J.A.

K. van Rensburg J.A.

C.W. Hourigan J.A.