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The court ordered the production of financial documents to an investor under a pre-incorporation shareholders' agreement.
The court granted Jason Allison's motion for production of financial documents from CMC Consumer Credit Limited, CMC Capital Inc., and Michael Smith.
Allison was found entitled to the documents as a shareholder under a Shareholders’ Agreement, as a trust beneficiary, or as an intended director.
The court rejected the defendants’ arguments regarding clean hands, limitation periods, and the status of Allison as a defaulting or beneficial shareholder.
The court also fixed costs in Allison’s favour.
A correspondent bank does not owe a duty to monitor a client for internal fraud.
The Joint Liquidators of Stanford International Bank Limited (SIB) appealed the dismissal of their negligence claim against The Toronto-Dominion Bank (TD Bank).
SIB was a vehicle for a massive Ponzi scheme.
The Liquidators claimed TD Bank was negligent in providing correspondent banking services by failing to detect and protect SIB from insider abuse.
The Court of Appeal upheld the trial judge's finding that TD Bank did not owe a novel duty of care to monitor SIB for internal fraud, as this fell outside the scope of TD Bank's undertaking as a correspondent bank.
The court also affirmed the trial judge's alternative finding that even if a duty existed, there was no breach of the standard of care, and that the trial judge's procedural rulings regarding witness recall were fair.
The appeal was dismissed.
