Tort Of Civil Fraud Requires Proof Of Inducement, Supreme Court Rules

The Supreme Court recently redefined the requirements to establish the tort of civil fraud (or tort of deceit) and held that proof that the defendant induced the plaintiff to act is a required element of the tort in Bruno Appliance and Furniture, Inc. v. Hryniak, 2014 SCC 8.

In its companion appeal, Hryniak v. Mauldin, 2014 SCC 7, the Court addresses the scope and interpretation of Ontario's amended Rule 20 on summary judgment (click here to read our article on that decision).

The facts

Albert Bruno, the principal of Bruno Appliance, met with Robert Cranston, the principal of a Panamanian company, Frontline Investments, Inc. and executed several investment documents in favour of Frontline in 2001. In 2002, Bruno met with Cranston and Gregory Peebles, a corporate-commercial lawyer, who at the time was at Cassels Brock & Blackwell and represented Cranston, Tropos Financial Corp. and its principal, Robert Hryniak. While Hryniak was not present at the meeting, Tropos paid for Peebles' attendance. Bruno Appliance subsequently wired US$1 million to Cassels Brock, which was intended to be invested. Bruno Appliance's funds were never invested; instead part of the funds were disbursed to another person, Reinhard, and the remainder was substantially drained. Bruno Appliance and the plaintiffs in the Mauldin appeal commenced an action in civil fraud...