



COURT OF APPEAL FOR ONTARIO

CITATION:
York
    Region Condominium Corporation No. 890 v. RPS Resource Property
    Services Ltd., 2012 ONCA 670

DATE: 20121003

DOCKET: C53346

Sharpe, Simmons and MacFarland JJ.A.

BETWEEN

York Region Condominium Corporation No. 890

Plaintiff (Appellant)

and

RPS Resource Property Services Ltd., William
    Garland, Karyn Garland, Kandiah Sivaneswaran, Brett Matus, Eric Schraibman,
    Richard Taylor, James Wilson, W.H. Bosley & Co. Ltd. and Royal Bank of
    Canada

Defendants (Respondent in Appeal)

Peter J. Osborne and Naomi D. Loewith, for the appellant

Catherine Francis, for the respondent Royal Bank of
    Canada

Heard and released orally: September 24, 2012

On appeal from the judgment of Justice L.A. Pattillo of
    the Superior Court of Justice, dated January 19, 2011.

ENDORSEMENT

[1]

The appellant appeals the dismissal of its claim against the Royal Bank
    of Canada (RBC).

[2]

The appellant retained the services of the defendant RPS Resource
    Property Services Ltd. (RPS) as property manager. RPS maintained a bank
    account with RBC to hold trust funds belonging to the appellant. RPS maintained
    a number of other similar accounts and, as the trial judge found, RPS
    improperly moved funds from account to account in breach of its trust
    obligations. As a result, the appellant suffered a loss of over $370,000.

[3]

The trial judge awarded the appellant judgment against RPS and its
    principal Garland but dismissed the claim against RBC. The claim against RBC was
    pleaded as breach of contract, conversion and negligence although the
    allegations of negligence were sketchy.  At trial the appellant was allowed to
    advance a claim for breach of trust (knowing receipt and knowing assistance). The
    trial judge gave comprehensive reasons dismissing the claim against RBC. He
    briefly mentioned that the claim included negligence but did not otherwise deal
    with negligence as a discrete cause of action. The claim for breach of contract
    was more or less abandoned at trial.

[4]

On this appeal, the appellant invites us to set aside the dismissal of
    its claim against RBC and to award damages in negligence.

[5]

The threshold issue is whether the appellant advanced a claim in
    negligence at trial.

[6]

We are not persuaded that negligence was advanced at trial as a distinct
    claim. We reach that conclusion for the following reasons.

[7]

First, in his otherwise very thorough and comprehensive reasons, the
    trial judge did not deal with negligence. In our view, it is virtually certain
    that the reason the trial judge did not deal with negligence because he did not
    consider the appellant to have relied on that cause of action at the trial.

[8]

Second, the trial record strongly suggests that negligence was not
    advanced as a distinct claim. There is no indication that the appellant dealt
    with the very contentious issue of whether a bank owes a duty of care to a
    third party. The plaintiff led no evidence as to the standard of care that
    would apply to a bank should there be such a duty of care.  It is impossible
    for us to understand how a claim in negligence could be made out in the absence
    of evidence on these issues.

[9]

We are not persuaded by the material filed as fresh evidence to
    supplement the trial record demonstrates that the appellant relied on
    negligence as a discrete cause of action at trial. The opening and closing arguments
    of counsel were not transcribed but the factum filed by the appellants trial
    counsel at the opening of trial did not advance negligence as a distinct claim.
    Trial counsels notes are, at best, ambiguous and indicate a concerted strategy
    to avoid the defence of contributory negligence.

[10]

That
    leads to the third point, namely, that there was a very strong tactical reason
    for the appellant to have focused on breach of trust and conversion and to have
    avoided negligence as a distinct cause of action. RBC was in a position to
    mount a strong defence of contributory negligence. Throughout the period in
    which RPS operated its fraud, the appellant received monthly statements from
    RBC from which it could readily be discerned that unauthorized transfers were
    being made from the account. The appellant failed to notice these unauthorized
    transfers. It was to avoid that defence that the appellant relied on breach of
    trust and conversion.

[11]

We
    do not accept the submission that this court could or should entertain and determine
    the claim in negligence without a proper record from the trial court. As noted,
    the appellants claim is far from straightforward. Difficult issues of duty of
    care and standard of care would have to be confronted. That would require a
    trial on issues of fact and as we read the record, no such trial took place in
    this case.

[12]

As
    we have concluded that the theory of recovery advanced before this court was
    not advanced at trial, we dismiss the appeal.

[13]

Accordingly,
    the appeal is dismissed with costs to the respondent fixed in the amount of
    $30,000 inclusive of disbursements and applicable taxes.

Robert J. Sharpe J.A.

Janet
    Simmons J.A.

J. MacFarland
    J.A.


