



COURT OF APPEAL FOR ONTARIO

CITATION: Dynasty Furniture Manufacturing Ltd. v.
    Toronto-Dominion Bank, 2015 ONCA 137

DATE: 20150302

DOCKET: M44316 (C59401)

Laskin, Rouleau and Huscroft JJ.A.

BETWEEN

Dynasty Furniture Manufacturing Ltd., Shafiq
    Hirani, Hanif Asaria, Dinmohamed Sunderji and 2645-1252 Québec Inc.

Respondents (Moving Parties)

and

The Toronto-Dominion Bank

Appellant (Responding Party)

Lincoln Caylor and Nathan J. Shaheen, for the moving
    parties Dynasty Furniture Manufacturing Ltd. et al.

Geoff R. Hall and Junior Sirivar, for the respondent the
    Toronto-Dominion Bank

Heard and released orally: February 23, 2015

On appeal from the order of Justice Michael A. Penny
    of the Superior Court of Justice, dated August 26, 2014.

ENDORSEMENT

[1]

The
    Toronto-Dominion Bank (TD) appeals from the order of Penny J. granting the
    respondent, Dynasty Furniture Manufacturing Ltd. (Dynasty), leave to amend its
    statement of claim. The respondent brings a motion to quash TDs appeal on the
    basis that the motion judges order is interlocutory, not final.

[2]

The
    respondent sued the appellant in negligence, alleging that the appellant had
    actual and constructive knowledge of fraudulent dealings by a third party (Stanford
    International Bank Limited) that caused the respondent to lose roughly $17
    million. Justice Wilton-Siegel struck those portions of the respondents
    statement of claim that alleged negligence as result of constructive knowledge
    on the basis that the circumstances of this case are not capable of
    establishing a relationship of sufficient proximity to found a duty of care:
    2010 ONSC 436, 74 C.C.L.T. (3d) 286, at para. 71. Justice Wilton-Siegels order
    was upheld by this court (2010 ONCA 514, 321 D.L.R (4
th
) 334
    (Dynasty One)), which endorsed the record as follows:

[5]      We are of the view that the facts, as pleaded, do not
    give arise [
sic
] to the duties relied upon in the struck portions of the
    statement of claim.  Although in some cases trial courts have, on motion to
    strike, allowed claims alleging a duty to ensure that a banks customers did
    not use their accounts for fraudulent purposes to proceed to trial, we were not
    referred to any trial or appellate decision in Canada holding that a bank has
    those duties to a non-customer. Thus the impugned claims do not fall within a
    category of cases that has been recognized by the courts.

[6]      Moreover, we do not consider this to be a case where
    this court should recognize a new duty of care under the
Anns/Kamloops
principles. We agree generally with the motion judges analysis of those
    principles. Based on that analysis, we are of the view that the facts, as
    pleaded in this case, are not sufficient to warrant recognizing a new duty of
    care by a bank to a non-customer.



[9]      In these circumstances, we do not find it necessary to
    decide whether a bank may ever be found to have a duty to a non-customer in
    circumstances where it does not have actual knowledge (wilful blindness or
    recklessness) of the fraudulent activities being conducted through an account
    of its customer. We leave the question of whether such a duty exists and, if
    so, in what circumstances, to another day.

[3]

In
    2014 the respondent moved to amend its statement of claim to reintroduce
    allegations grounded in constructive knowledge. The motion judge allowed the
    motion under Rule 26 of the
Rules of Civil Procedure
, R.R.O. 1990, Reg.
    194, concluding that the amended pleading particularized the allegation based
    on information that was neither known nor reasonably knowable in 2009/2010. The
    motion judge considered this courts decision in Dynasty One to be controlling
    of the motion, noting that the court left open the possibility that a duty
    could be owed to a non-customer but that sufficient facts had not been pleaded
    to establish the basis for the duty. The motion judge considered and rejected
    the argument that the motion was an abuse of process or unfair.

[4]

The
    question raised by this motion to quash is whether the motion judges order is
    interlocutory or final in nature. If the order is interlocutory the appeal lies
    to the Divisional Court, whereas if it is final, the appeal lies to this court.

[5]

Decisions
    permitting amendments to pleadings are normally understood to be interlocutory
    in nature: see
Merling v. Southam Inc.
(2000), 183 D.L.R. (4th) 748
    (Ont. C.A.), at para. 2. However, the appellant argues that the motion judges decision
    is properly characterized as final because it deprives the appellant of its
    defence to that part of the action based on constructive knowledge.

[6]

The
    appellant misconceives the nature of the motion judges decision. As this court
    noted recently in
Waldman v. Thomson Reuters Canada Ltd.
, 2015 ONCA 53,
    at para. 22, the issue is not whether the matter before the motion judge has
    been disposed of finally by an order but, instead, whether an order brings an
    end to an action or resolves a substantive claim or defence.

[7]

The
    motion judges decision simply allows the matter to proceed to trial. The
    decision did not have the effect of depriving the appellant of a substantive
    defence. It remains open to the appellant to advance a substantive defence to
    the argument that a duty to a non-customer can be created based on constructive
    knowledge and that constructive knowledge can be made out on the facts of this
    case. Thus, the decision of the motion judge is interlocutory in nature and it
    follows that the appeal lies to the Divisional Court.

[8]

Accordingly,
    the appeal is quashed.

[9]

Costs
    to the respondent of the motion and the appeal are set in the agreed amount of
    $20,000, inclusive of disbursements and relevant taxes.

John
    Laskin J.A.

Paul
    Rouleau J.A.

Grant
    Huscroft J.A.


