Ontario Court Of Appeal Summaries (October 29 – November 2, 2018)

Following are the summaries for this week's civil decisions of the Court of Appeal for Ontario.

There were not many substantive decisions. Perhaps the most interesting was Am-Stat Corporation v Ontario. In that case, the plaintiff sued the Ontario government for negligence or negligent misrepresentation. The plaintiff alleged that it had partly relied on a corporation profile report to approve a mortgage loan made to a corporation. The report indicated that the purported representative of the borrower who was dealing with the lender was indeed an officer and director of the borrower. It turned out to be a fraud, and the representative had no relationship to the borrower. The plaintiff lost its loan proceeds and sought to recover them from the province. The Court of Appeal upheld the lower court's decision striking the action as disclosing no reasonable cause of action. The province is not responsible for ensuring the accuracy of the information filed on behalf of corporations. This is a reminder that corporate searches are useful investigative tools and can assist with due diligence during a transaction, but they are not determinative of anything and should not be relied upon.

Other topics covered this week included costs in the family law and class action contexts, private and public interest standing in the insurance/MVA context, and wrongful dismissal in the doctor's hospital privileges context.

CIVIL DECISIONS

Am-Stat Corporation v Ontario, 2018 ONCA 877

[Doherty, van Rensburg and Hourigan JJ.A.]

Counsel:

R.B. Moldaver Q.C., for the appellant

A. Jin, for the respondent

Keywords: Torts, Negligence, Negligent Misrepresentation, Crown Liability, Duty of Care, Anns/Cooper Test, Corporations, Corporation Profile Reports, Civil Procedure, Striking Pleadings, No Reasonable Cause of Action, Rules of Civil Procedure, Rule 21, Corporations Information Act, R.S.O. 1990, c. C.39, ss. 8, 10, 19, and 21, R. v. Imperial Tobacco, 2011 SCC 42

Facts:

The appellant is a mortgage broker who was defrauded by GN, who claimed to be the sole owner and officer of Aldrogian Holdings Inc. ("Aldrogian"), and persuaded the appellant to advance $1.8 million in loans secured by mortgages on property owned by Aldrogian. In fact, GN had no affiliation with Aldrogian. The appellant claimed that in advancing the money he relied on a corporation profile report and other documents obtained from the Ministry of Government and Consumer Services that incorrectly identified GN as a director and officer of Aldrogian. The appellant alleged that the Ministry owed a duty of care to the public and in particular to the appellant to reasonably ensure the accuracy and reliability of the information it collected, maintained and disseminated for a fee, and knew or ought to have known the appellant would rely upon.

The motion judge applied the Anns/Cooper test and concluded that there was no duty of care owed by the Ministry to the appellant to ensure the accuracy of the information. She concluded that there was no prima facie duty of care and that such a duty would be against public policy.

Issues:

(1) Did the motion judge err in her application of the Anns/Cooper test?

Holding:

Appeal dismissed.

Reasoning:

(1) No. The Court found that the appellant's claim failed the first stage of the Anns/Cooper test.

As the motion judge noted, when the defendant is a public actor, a relationship of proximity giving rise to a prima facie duty of care may only arise explicitly or by implication from the language of the governing legislation or from the nature of the interactions between the parties (R. v. Imperial Tobacco). The Court rejected the appellant's assertion that because the Corporations Information Act (the "Act") did not expressly exclude a private law duty of care, that it must exist. The Act required all corporations carrying on business in Ontario to file certain prescribed information and changes in information. A corporation profile report reflected information on the public record for the subject corporation as of the date the report was ordered. Nothing in the Act pointed to an intention to create a private law duty of care on the part of the regulator to third parties to ensure the accuracy of information filed, and the language of the statute was inconsistent with the imposition of such a duty. Section 8 of the Act requires the Minister to enter into a record the information received. Section 21 specifically provides that "the Minister may accept the information contained in any return or notice filed under [the] Act without making any inquiry as to its completeness or accuracy". Section 19 described the Minister's certificate as certifying only that the information had been filed, not its accuracy.

The Court rejected the appellant's argument that because Ontario had the discretion not to publish the information, once it did make the information public, it undertook a duty to ensure its accuracy. There was no such discretion, as s. 10 of the Act provided for a right to public access to the information filed and maintained by the Ministry upon payment...