Thomas Delbert Galligan

The respondent bank sought indemnity under an insurance policy for losses arising from a Ponzi scheme operated by a customer.

The bank obtained partial summary judgment on the interpretation of the "direct financial loss" element of the fidelity coverage section.

The appellants (insurers) appealed, arguing the motion judge erred in granting partial summary judgment on a constituent element of a claim rather than on the claim itself, failed to interpret the policy as a whole, adopted a theory of liability not advanced by the parties, and misconstrued the relief sought by the appellants.

The Court of Appeal allowed the appeal, set aside the order, and directed the action to proceed to trial.

The respondent disputed fees charged by the appellant accountants for services rendered in respect of three transactions, including the structuring of a butterfly transaction.

A fees action was settled and the parties executed a broadly worded release in 2008 referring to all claims existing up to that time arising from any and all services provided through to the end of 2007.

In 2011, the respondent learned that the butterfly transaction could be subject to an income tax liability of more than $1 million instead of being tax free as intended.

The respondent sued for damages for negligence.

The motion judge and Divisional Court dismissed the appellant's motion for summary judgment, finding the release did not bar the claim because the negligence only came to light in 2011.

The Court of Appeal allowed the appeal, holding that the release clearly and unequivocally covered all claims arising from services provided through December 31, 2007, including unknown claims.

The fourth party brought a motion seeking particulars of allegations made against it in a fourth party claim and an extension of time to deliver a defence.

The court reviewed the purposes of pleadings and particulars under the Rules of Civil Procedure, emphasizing that particulars are ordered only where necessary to permit the responding party to plead intelligently and where the information is not already within that party’s knowledge.

In the context of a multi‑party construction dispute involving third and fourth party claims, the court held that it would be unreasonable to require a third party to particularize allegations more fully than the pleadings already advanced against it.

Limited particulars were ordered regarding which specifications were allegedly breached and who should have been notified of alleged problems.

The moving party also received an extension of time to deliver its defence.