Fraud: Where To Begin ' Part II

• Published date: 25 May 2023
• Subject Matter: Litigation, Mediation & Arbitration, Criminal Law, Trials & Appeals & Compensation, White Collar Crime, Anti-Corruption & Fraud
• Law Firm: DMG Advocates
• Author: Corey Groper and Ryder Gilliland

Fraud: The Related Causes of Action

In our introductory bulletin, we explored the tort of civil fraud and examined its constituent elements. We also considered the doctrine of equitable fraud which "does not necessarily connote dishonesty" and is, therefore, "less odious than common law fraud."¹

The objective of this second bulletin is to explore some of the other causes of action that can be (and often are) pled in conjunction with a claim for civil fraud, including conversion, conspiracy and bribery. The appropriateness of each cause of action depends on the specific facts and circumstances of the particular case.

Although they are often interrelated, the various causes of action associated with a fraud claim require separate findings in accordance with the law that governs each of them. It is an error for a court to lump them together and treat them as one.²

Conversion

The tort of conversion involves the wrongful interference with the goods of another, such as taking, using or destroying those goods in a manner inconsistent with the owner's right of possession.³ The crux of the tort is the wrongful interference by one person with the goods of another.⁴ Evidence must show or permit an inference to be drawn that the defendant acted in such a way as to deny the plaintiff's title or possessory rights.⁵

The constituent elements of the tort of conversion include: (1) a wrongful act by one party involving the goods of the other; (2) the act consisted of handling, disposing of, or destroying the goods; and (3) the wrongful party's actions had the effect or intention of interfering with the other party's right to the goods.⁶

The tort is one of strict liability.⁷ Even an innocent third-party recipient of stolen goods may be found liable for engaging in conversion.⁸ It is no defence to say that the wrongful act was committed innocently or, even, without negligence.⁹ The intent element of the tort is "concerned not with the intention to steal or commit fraud but, rather, to assert authority or dominion over goods in a manner that is inconsistent with the rights of the true owner".¹⁰

Conspiracy

In Agribrands Purina Canada Inc. v. Kasamekas, the Court of Appeal for Ontario set out the five elements required to ground an unlawful act conspiracy. They are: (1) the defendants acted in combination, that is, in concert, by agreement or with a common design; (2) the defendants' conduct was unlawful; (3) the defendants' conduct was directed towards the plaintiff; (4) the...