



COURT OF APPEAL FOR ONTARIO

CITATION:
Toronto-Dominion Bank v. Mawji, 2012 ONCA 152

DATE: 20120309

DOCKET: C54257

Winkler C.J.O., Simmons and Cronk JJ.A.

BETWEEN

The Toronto-Dominion Bank

Plaintiff (Respondent)

and

Karima Mawji also known as Karima Padamsey and
    Karim Mawji also known as Karim Sadrudin Gulam Hussein Mawji and Hoyes,
    Michalos & Associates Inc., Trustees in Bankruptcy of the Estates of Karima
    Padamsey and Karim Mawji also known as Karim Sadrudin Gulam Hussein Mawji,
    Bankrupts

Defendants (Appellants)

Richard D. Howell, for the appellants

Susanne M. Balpataky, for the respondent

Heard and released orally: March 1, 2012

On appeal from the order of Justice Herman Wilton-Siegel
    of the Superior Court of Justice, dated August 19, 2011.

ENDORSEMENT

[1]

The Deputy Registrar in Bankruptcy dismissed the
    respondent's motion for an order under s. 69.4 of the
Bankruptcy and
    Insolvency Act
, R.S.C. 1985 c. B‑3, lifting
    the automatic stay to permit the respondent Bank to proceed with an action
    against the bankrupts for fraudulent misrepresentation and obtaining funds from
    a line of credit by false pretences. The Deputy Registrar concluded there was
    no evidence of oral contact between the bankrupts and the Bank and no evidence
    of written misrepresentation by the bankrupts.

[2]

On appeal to the Superior Court, Wilton-Siegel
    J. allowed the appeal and lifted the automatic stay. The bankrupts appeal from
    that decision.

[3]

This is a case in which the bankrupts
    obtained continuing advances under a line of credit after the collateral
    mortgage securing the line of credit had been paid out and discharged with part
    of the proceeds of a conventional mortgage. Nonetheless, the bankrupts
    continued to draw advances and make payments under the line of credit.

[4]

Although there was no direct evidence on
    the motion of a misrepresentation or false pretences, the appeal judge held
    that the background circumstances leading up to the unsecured draws could lead
    a trier of fact to infer that, to the knowledge of the bankrupts, the Bank
    would not have been prepared to provide them with an unsecured line of credit.
    This, in turn, could support an inference that the manner of using the line of credit
    amounted to a false representation or false pretence.

[5]

We agree with the appeal judges conclusions
    concerning the available inferences. The appeal is therefore dismissed.

[6]

Costs of the appeal are to the respondent on a
    partial indemnity basis, fixed in the amount of $5,765, inclusive of
    disbursements and applicable taxes.

Winkler C.J.O.

Janet Simmons
    J.A.

E. A. Cronk J.A.


