The plaintiff invested funds with a corporate entity, with another corporation acting as escrow trustee.
After losing her investment, she sued the escrow trustee, its principal, and others.
She also sued the insurer that had issued a fidelity bond to the escrow trustee.
The plaintiff successfully moved to add a derivative claim against the insurer on behalf of the escrow trustee under s. 246(1) of the Business Corporations Act.
The escrow trustee and its principal appealed.
The Divisional Court allowed the appeal, finding the plaintiff was not a proper complainant under s. 245(c).
The court held that the proposed derivative claim fell outside the scope of the fidelity bond because the principal was the controlling mind of the escrow trustee, not an employee, and could not have committed a fraudulent act against his own alter ego.
