Sandra Darla Astolfo

The appellants, a group of subcontractors and a bank, appealed an application judge's decision that rescission of surety bonds might be possible even if it affects innocent third parties.

The bonds were issued by Zurich Insurance Company Ltd. for a large construction project, but Zurich later discovered alleged fraudulent misrepresentations and collusion that induced it to issue the bonds.

The appellants sought a declaration that rescission was unavailable as a matter of law due to the involvement of innocent third parties.

The Court of Appeal dismissed the appeal, affirming that prejudice to third parties is not an absolute bar to rescission, especially in cases of fraudulent misrepresentation, and that such a determination requires a full factual record at trial.

This case conference endorsement outlines procedural progress in a complex, multi-party construction litigation involving Carillion Construction Inc., the City of Toronto, and NORR Limited, among others.

The court addressed the schedule for executive discoveries, ruling that they must proceed as planned, contrary to the City's submission.

It also confirmed the mediation schedule for March-April 2019, involving various claimants and insurers.

Further directions were given regarding documentary production by subcontractors and the City's amended third-party claim against Metrolinx, setting deadlines for Metrolinx's response or motion.