ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: 10-48528
DATE: 2012-06-15

BETWEEN:

PETER WILSON
Plaintiff

– and –

TORONTO DOMINION BANK and TD CANADA TRUST
Defendants

Walter Langley, for the Plaintiff

Todd J. Burke, for the Defendants

HEARD: June 8, 2012

SUMMARY JUDGEMENT REASONS FOR DECISION

T.D. RAY, J.

Introduction

[1] The defendants (“Bank”) move for summary judgement on their Statement of Defence dismissing the plaintiffs claim on the ground that the plaintiff’s (“Wilson”) claim is barred by section 438 of the Bank Act, the Limitations Act, 2002, and in any event has not established that he was entitled to unclaimed proceeds in the amount of $188,384.67 issued by it, and forwarded to the Bank of Canada.

[2] Wilson’s cross motion is for summary judgement in his favour for damages for the loss of investment interest on the unclaimed amount, or alternatively, for damages for unjust enrichment.

[3] The record includes the pleadings, affidavits with exhibits, and transcripts of examinations for discovery. It is a complete record insofar as the documents exist.

[4] Wilson recovered $188,384.67 from the Bank of Canada as unclaimed proceeds, and now seeks damages from the Bank for negligence and breach of fiduciary duty because of lost investment opportunities from not having the funds and costs incurred in claiming the unclaimed proceeds. The Bank has never acknowledged that Wilson was the owner of the unclaimed proceeds.

Summary Judgement

[5] The principles at play for summary judgement were expanded when Rule 20 was amended to require summary judgment “where the court is satisfied there is no genuine issue requiring a trial”, with enhanced powers [1], and clarified by Combined Air Mechanical Services Inc. v. Flesch, 2011 ONCA 764 that a judge “must assess whether the attributes of the trial process are necessary to enable him or her to fully appreciate the evidence and the issues posed by the case”; and further the judge on a motion for summary judgement:

…must consider if this is a case where meeting the full appreciation test requires an opportunity to hear and observe witnesses, to have the evidence presented by way of a trial narrative, and to experience the fact-finding process first-hand. Unless full appreciation of the evidence and issues that is required to make dispositive findings is attainable on the motion record – as may be supplemented by the presentation of oral evidence under rule 20.04(2.2) – the judge cannot be “satisfied” that the issues are appropriately resolved on a motion for summary judgment.

[6] Neither party has taken the position that a trial or a summary trial with oral evidence is necessary. Both parties have approached this motion on the basis that their interests are capable of being resolved without the need for oral evidence. That does not alter my obligation to examine the ‘full appreciation test’.

The facts

[7] On December 29, 1995, the predecessor of the Bank, CT Financial Services, issued a bank draft to “Peter Wilson” for $188,384.67 at its branch #0392 in Toronto. [3] As of September, 2004, the bank draft had not been cashed or presented for payment. December 31, 2005, (after ten years of being unclaimed) the Bank transferred the unclaimed proceeds to the Bank of Canada, following provisions of the Bank Act and which included publishing details in the Canada Gazette. The transfer according to the Bank identified the payee as “Peter Wilson”. However the publication in the Canada Gazette, June 18, 2005, did not identify “Peter Wilson”. The name was blank. The Bank’s position is that was not its error.

[8] March 17, 2008, Wilson discovered the unclaimed proceeds posted on the Bank of Canada website as a result of a telephone call from someone whose business it is to check the website and offer their services for reclaiming money. August, 2008, Wilson contacted the Bank and advised that he believed he was the “Peter Wilson” identified on the website.

[9] The Bank had no evidence that Wilson had ever been its customer, and noted that the bank draft had been issued by a Toronto branch, while Wilson had always lived in Ottawa. Wilson had no proof of ever having been a customer of the Bank, and no proof of his connection to the unclaimed proceeds. As a consequence Wilson was able to recover the unclaimed proceeds from the Bank of Canada, but was required to post a bond since the Bank would not support Wilson’s ownership. In support of his claim, Wilson swore a statutory declaration which set out the following information: That he had never had an account with the TD Bank, and had moved and he had not notified the TD Banks of his address so that if a cheque had been sent to him, it would have been returned; that he had been unable to “account for the funds despite a comprehensive examination of relevant banking and accounting documents in my possession”.

[10] In these proceedings Wilson has sworn under oath that on October 31, 1989, he sold a cottage for $150,000, and that the net proceeds were approximately $120,000. He recalls investing those proceeds in GICs or something similar, but cannot remember with what institution. RBC was his principal investment counsellor. He believes, however, that it was with the Bank, although he has no recollection. Wilson has not been able to produce any records concerning the proceeds of the sale. His income tax returns do not identify interest earned on a $120,000 GIC, nor any GIC from the Bank. Other GIC interest is identified in his income tax returns.

[11] Wilson took historical rates of interest from the Bank and calculated that interest on the $120,000 from the time of the sale of the cottage up until the date of the draft would bring the total to $188,384.67. He says that this is evidence that the unclaimed balance is his. However, before doing that, he contacted the Bank and asked for the historical interest on $150,000. [4]

[12] Wilson issued a statement of claim on May 19, 2009. The Bank delivered a defence and discoveries are complete.

Issues

[13] Has Wilson established that he is “ The Peter Wilson”, vis-a-vis the Bank, and is the finding of the Bank of Canada as to Wilson’s ownership of the unclaimed proceeds conclusive as against the Bank? On the evidence, has he done so? Does that issue require the trial of an issue?

[14] Was the Bank negligent or in breach of a fiduciary duty to Wilson such as to entitle Wilson to damages from the Bank; and does that determination require the trial of an issue?

[15] Do the provisions of the Bank Act (s. 483) discharge the Bank’s liability beyond the amount of the unclaimed proceeds? Does that issue require the trial of an issue?

[16] Is Wilson’s action barred by the Limitations Act? Does that require the trial of an issue?

[17] What are Wilson’s damages, and does that require the trial of an issue?

Analysis

Was Wilson the payee named in the bank draft?

[18] I am not satisfied that I can determine whether Wilson was the payee described in the bank draft of December 29,1995, drawn by Ct Financial Services in the amount of for $188,384.67, for the purpose of asserting a claim for damages against the Bank, without a trial of the issue. The ‘full appreciation test’ [5] requires that in order to resolve this issue, I must hear oral evidence in the context of a trial of the issue. The burden is on Wilson. The Bank has consistently declined to support Wilson’s ownership claim and has no records concerning the bank draft. The Bank of Canada required Wilson to prepare a statutory declaration to support his claim. While the Bank of Canada’s willingness to forward the unclaimed proceeds to Wilson may be conclusive as between the Wilson and the Bank of Canada as to Wilson’s ownership – with the reservation that the Bank of Canada required Wilson to post a bond in the amount of $5,651.54 – it was not a finding in rem, is not res judicata, and is not binding on the Bank; but is some evidence of ownership. There may be a number of ways in which Wilson might have become a payee in a bank draft, some without him ever having become a customer or in a relationship entitling him to damages. [6] Wilson’s evidence is not without difficulty. He produced no evidence of ever having been a customer of the Bank, and in fact concedes that was never the case. Wilson’s case is that he believes he purchased a GIC, likely with Toronto Dominion Bank in the amount of $120,000 in December, 1989, after selling a cottage in October, 1989, and that on its maturity, the Toronto Dominion Bank issued a bank draft to him as payee. There is no evidence of a GIC with Toronto Dominion Bank. While Wilson had a number of GIC’s, he dealt mainly with RBC at the time. His income tax returns at the time show GIC interest from different institutions, but nothing from the Toronto Dominion Bank. Property records show that he sold his cottage for $150,000. During the period he was trying to establish his claim, he wrote to the Bank to ask about the interest on $150,000 from December 29, 1995. Wilson produced no evidence as to how he arrived at $120,000 for the investment. He calculated interest on the $120,000 to reach the unclaimed proceeds amount of $188,384.67, not on $150,000 which was the proceeds from the sale, and the amount he inserted in his email to the Bank. [7] Also troublesome is that Wilson never lived in Toronto, yet the Bank’s records, such as they are, show the bank draft associated only with Toronto branches, and no Ottawa branches. While Wilson is very critical of the Bank’s lack of record keeping, Wilson has no records and apparently forgot about the investment until he was telephoned in March, 2008, and told that his name appeared on the Bank of Canada website of ‘unclaimed proceeds’. All of that evidence needs to be tested under cross-examination, and credibility findings made. However, for the reasons that follow, I don’t consider it necessary to order a trial of this issue.

Was the Bank negligent or in breach of a fiduciary duty such as to entitle Wilson to damages?

[19] For the reasons given above that issue would require the trial of an issue, but for the reasons that follow.

Is the Bank released by the Bank Act?

[20] The unclaimed proceeds were paid by the Bank to the Bank of Canada December 29, 2005, after being unclaimed for ten years. The Bank Act [8], provides for a release and “ discharges the bank from all liability in respect of the deposit or instrument ”, on payment of the unclaimed proceeds to the Bank of Canada. There is no issue concerning the manner or the amount paid to the Bank of Canada, although Wilson is critical of the Bank’s failure to identify the payee’s address as stipulated in s. 640(2) [9]. However the requirements of the section limit the information “in so far as is known to the bank,”. The Bank’s position is that they had no record of the payee’s address. Failure to have the payee’s address might be consistent with the payee never having been a customer of the bank such that they never had an address for Wilson, or that Wilson had a GIC with them and they lost the record of his address. There is no evidence that the Bank contravened the provisions of s. 640(2).

[21] The release in the Bank Act releases the bank from all liability “in respect ... of the ...instrument”- in this case the bank draft dated December 29, 1995. These words are to be given the widest scope. [10]

[22] There is only one authority referencing s. 438 [11]. It is of limited assistance since it did not deal with the scope of the release, but a very different situation involving a forged certified cheque and Wilson being in the wrong jurisdiction.

[23] Wilson’s claims fall into two categories: firstly, costs he says he incurred to establish to the Bank of Canada’s satisfaction that subject to the posting of a bond, he was the rightful owner of the unclaimed proceeds. Secondly, his claim is for lost investment opportunities or interest from December 29, 1995.

[24] The costs Wilson says he incurred to establish his entitlement to the unclaimed proceeds include the cost of the bond, time lost from work, and legal fees to prepare the statutory declaration and total $14,605.19. Without determining whether the amounts being claimed are appropriate – for example the $8,000 lost time from work- I consider these costs to be in respect to the bank draft which formed the basis for the unclaimed proceeds held by the Bank of Canada. These damages clearly fall within the release contained in s 438 (2) as being in respect of an instrument.

[25] Wilson’s claim for loss of interest or lost investment opportunity has been assessed by him at $156,877.35. He used historical interest rates predicated on his likely reinvestment of the amount of the bank draft in the amount of $188,384.67 from December 29, 1995. The real nub of the issue, however, is that the Bank put the funds into a non-interest bearing account when they prepared the bank draft, and as counsel stated repeatedly during argument – that was not their money, it belonged to Wilson. The Bank’s practice of putting those funds into a suspense account did not only happen on this occasion, but applied to all bank drafts or certified cheques. That was their practice. The claim for interest or lost investment revenue therefore arises from the bank draft and its treatment by the Bank in putting the funds for the bank draft into a non-interest bearing suspense account. In my view that makes Wilson’s claim in respect of the bank draft, and it therefore falls into the s. 438(2) release. The only way the claim could fall outside the bank draft so as not to be in respect of the bank draft would be if Wilson could establish that he had a customer relationship with the Bank, and had evidence that he had instructed the Bank to place the funds into an interest bearing account, such as might be the case with a solicitor depositing a client’s funds into a non-interest bearing trust account contrary to the client’s instructions that the fund bear interest. Evidence of that nature might elevate the relationship beyond the bank draft itself into the Bank’s management of the Bank funds in accordance with instructions given or received. There is no evidence of that kind here. And in fact, Wilson conceded that he was never a customer of the Bank.

[26] For these reasons, I consider Wilson’s claims to be barred by s. 438(2) of the Bank Act which discharges it from liability, irrespective of whether Wilson himself was the payee of the bank draft. It is Wilson’s claims, because of their nature that are barred because they are “in respect of” the bank draft. That fact discharges the Bank from liability.

Is Wilson’s claim barred by the Limitations Act?

[27] The Limitations Act, 2002 [12] provides for a two year limitation period. I accept on the evidence that the telephone call advising his name was on the website in March 2008 did not start the clock running. Wilson contacted the Bank in August, 2008 and advised that he believed he was the owner of the “unclaimed proceeds”. I accept that is the date when he had sufficient appreciation of his claim. Wilson commenced his action May 19, 2010 within two years. His claim is not barred by the Limitations Act, 2002.

What are Wilson’s damages?

[28] Any damages sustained by Wilson are dependent on findings made concerning whether Wilson was a payee in the bank draft. That evidence and those findings are necessary to an assessment of Wilson’s damages. That cannot be done on this motion for summary judgement.

Conclusion

[29] Summary judgement is granted in favour of the Bank. Wilson’s action is dismissed. Both parties filed their Form 57 costs outlines at the conclusion of argument. If the parties cannot agree on costs, they may make written submissions within 14 days, with reply after a further 5 days, of 2 pages or less addressed to my chambers in Ottawa.

Honourable Justice Timothy Ray

Released: June 15, 2012