2013 QCCQ 4280, 2013 QCCQ 4280

Court 1 Sports Inc. c. Banque Toronto Dominion 2013 QCCQ 4280 COURT OF QUEBEC CANADA PROVINCE OF QUEBEC DISTRICT OF MONTRÉAL TOWN OF MONTRÉAL Civil Division No: 500-22-187251-114 DATE: April 26, 2013 ______________________________________________________________________ BY THE HONOURABLE SUZANNE HANDMAN, J.C.Q. ______________________________________________________________________ COURT 1 SPORTS INC. Plaintiff v.

BANQUE TORONTO DOMINION Defendant ______________________________________________________________________ JUDGMENT ______________________________________________________________________ [ 1 ] Court 1 Sports inc. (“Court 1”), the victim of a fraud, is claiming $66,340.01 from Toronto Dominion Bank (“TD”).

It invokes TD’s wrongful conduct and negligence in failing to verify whether there was an authentic endorsement on a fraudulent cheque payable to Court 1 and, given the warning on Court 1’s account, in omitting to inform Court 1 the cheque in question was deposited in its account. [ 2 ] TD contests the claim, maintaining that Court 1 was negligent in the conduct of its affaires and is the author of its own misfortune. QUESTIONS IN LITIGATION: 1 . What principles are applicable? 2 . What is a bank’s standard of conduct and did TD commit a fault in dealing with Court 1’s transactions? 3 .

Was there negligence on the part of Court 1? THE EVIDENCE: [ 3 ] Court 1, with a head office in Montreal, manufactures and sells sports equipment and related goods. The business is international, with customers in UAE, Saudi Arabia, Cuba, Hong Kong, etc.. It receives orders by e-mail and fax. The company is operated by Li Xu, its president, sole shareholder and signing officer. [ 4 ] In November 2000, Court 1 concluded a Business Banking Agreement with TD. Since 2001, Court 1 has a Canadian and a US account plus a $200,000 line of credit.

On November 8, 2005, it concluded an additional agreement to receive notification of incoming wire payments. [ 5 ] According to Mrs. Xu, deposits are handled either by her or by David Chi, who is responsible for accounting. It is company policy that cheques be noted in a deposit book and the back of every cheque contain the company’s stamp but there is no evidence such

information was transmitted to its bank. [ 6 ] Canadian and American clients pay for goods by cheque, in their respective currencies. Court 1 requires that overseas clients pay by wire transfer. [ 7 ] The background of this case begins in September 2011. Royal Stewart, a customer of Court 1, received an e-mail from a so- called Lateef Hammed, in Dubai, who it did not know. Royal Stewart forwarded the e-mail to Court 1 since Lateef’s request to purchase gym mats was specific to Court 1’s product line. [ 8 ] On September 19, 2011, Mrs. Xu sent Lateef an e-mail advising him the mats would cost $4,295.

She requested the goods be paid by a bank transfer. [ 9 ] On September 22, 2011, Lateef advised Mrs. Xu by e-mail that, by mistake, a payment of $69,600 USD had been sent to Court 1’s account instead of $4,295. [ 10 ] Following this e-mail, Lateef called Mrs. Xu every five minutes, non stop. He was in a panic and asked her to return $69,500 less the cost of the mats ($4,295) as well as the bank charge of $168. The amount requested came to $65,167 USD [1] . [ 11 ] On the same day, Mrs.

Xu, assuming Lateef had made an honest mistake, agreed to return the funds and requested his banking information. [ 12 ] Lateef sent Mrs. Xu the information she requested as well as wire transfer instructions. Mrs. Xu sent an invoice addressed to Latrade & Supplies LLC, at the shipping address Lateef provided to her. She had not verified this company’s identity, explaining the amount of $4,295 charged for the mats was a small sum. [ 13 ] In the interim, Mrs.

Xu asked David Chi, responsible for accounting, to check Court 1’s on line statement, for its U.S. account, on a daily basis, to see if a wire transfer had arrived and if the funds had been credited to Court 1’s account. [ 14 ] On September 23, 2011, Court 1’s account statement showed a deposit of $69,600 USD. Although the statement shows a deposit, Mrs. Xu assumed the funds arrived by wire transfer and the funds would be in the account within days. [ 15 ] Lateef did not stop calling. On September 27, 2011, by means of TD’s electronic banking service, Mrs.

Xu authorized the bank to make a rapid wire transfer of $65,167 USD to a bank in Dubai, U.A.E., to a beneficiary called John Joseph General Trading LLC (“General Trading”), situated in Jebe Lahli, U.A.E.. [ 16 ] She testified that Lateef had told her General Trading was a holding company of Latrade Supplies. She stated many customers have holding companies with different names and addresses from that of their shipping company. [ 17 ] Mrs. Xu informed Lateef the funds had been sent. He made another order. On September 28, Mrs.

Xu shipped the 1st order and provided a quote for the 2 nd . [ 18 ] On October 4, 2011, Mrs. Xu learned that the cheque deposited to Court 1’s account was not valid. China Tse, TD’s Client Service Officer at its Côte-Vertu branch sent Mrs. Xu a copy of the cheque and related documentation, which indicated that $69,600 would be charged back to Court 1’s account. [ 19 ] Mrs. Xu was in a panic. She had never seen the cheque before and testified that Court 1 never accepts deposits made by a third party.

By means of Internet, using the routing number on the cheque, she found the cheque had been issued by First Citizens Bank & Trust Company in Raleigh, North Carolina. She tried to order a stop payment but it was too late. [ 20 ] Mrs. Xu contacted TD’s Customer Service but was unsuccessful in her attempt to find out who deposited the cheque and why it had been deposited without contacting Court 1. [ 21 ] Mrs. Xu filed a report with the police, the RCMP, la Chambre de sécurité financière and the Dubai police.

She contacted the Consumer Agency of Canada and complained to the Dubai Chamber of Commerce and to the Chamber of Dubai Customer Rights Office. She then mandated her attorneys to sue TD. [ 22 ] Corine Benitah, Manager of TD’s largest Quebec branch, at Côte-Vertu, which handles over 50,000 transactions per month and where Court 1 has its account, testified that personal and commercial accounts are not treated in the same way. TD tries to be expeditious and not interfere in its customers’ business dealings. [ 23 ] TD is more protective of personal accounts.

Its Financial Services Agreement applies only to personal accounts and is separate from its Business Banking agreement whose commercial customers are credit worthy and sophisticated and who expect TD to process deposits in a timely manner; their accounts are exempt from TD’s Hold Funds Policy.

Court 1’s US commercial account, like other commercial accounts is not subject to any Holds Funds policy. [ 24 ] Deposits by mail or messenger are not unusual; funds can be deposited without a signature on the back of a cheque when the payee of the cheque corresponds to the name of a client and has the same name as the account holder. A teller’s stamp is TD’s sign of endorsement. Ms. Benitah claimed it is not feasible for business operations to verify cheques that are not endorsed with a signature. [ 25 ] There are circumstances where verification does take place.

This occurs where the amount involved is large or unusual, when a cheque is altered or if it is drawn on an unknown bank. The same applies when an account is red flagged. [ 26 ] Court 1’s account was flagged for manual wires. When TD receives instructions from Court 1 to send a manual wire, a message will appear in its file to phone Court 1 and verify whether it agrees to the outgoing wire. The warning deals with a manual outgoing wire

and does not pertain to a deposit. [ 27 ] According to Ms. Benitah, when the cheque and deposit memo were delivered to TD’s branch, no specific verification was warranted since Court 1, a commercial client is exempt from the Hold Funds Policy.

The name of the bank on which the cheque was drawn and the amount involved did not raise any red flags, nor did the broken English in the memo, since all the key elements were present. [ 28 ] While the last digit of the transit number is erroneous, the cheque contained the correct branch number and account number for the payee; the accompanying memo contained instructions to deposit it. After noting these elements and the amount involved, TD deposited the cheque. Ms.

Benitah testified that it contained the necessary information to process the cheque, which was for deposit in the account of a high level, sophisticated, commercial client. [ 29 ] Ms. Benitah explained that a manual endorsement is not needed to deposit a cheque. A teller’s stamp is sufficient. TD’s administration manual states: cheques deposited to a business/organisation account are to be endorsed by a stamp showing the name, the account number and transit number of the company/organization.

If the account and transit number are not on the stamp, write them on the back of the cheque and confirm endorsement by stamping the cheque with your teller stamp. (…) Cheques not endorsed by the customer must be stamped by the branch with the teller stamp. The account number and transmit number must be written on the back of the cheque… [ 30 ] When questioned as to the administration manual, given that the cheque does not have the account and transit number written on the back, Ms. Benitah stated that these numbers are for reference purposes only.

THE APPLICABLE PRINCIPLES: [ 31 ] The legislative competence in the area of banking falls under federal legislation. However, this fact does not remove banks or the standards of banking from the field of civil law. The bank’s standard of conduct: [ 32 ] Our doctrine has established that a bank must act in a prudent and diligent manner with respect to its clients and its obligation is generally one of means [2] ; its employees have the same obligation of prudence and diligence.

As indicated in the text Droit Bancaire [3] : Ce devoir de diligence et de prudence raisonnable fait appel à l’application d’un critère objectif, celui de l’employé bancaire moyennement diligent et prudent. Les événements doivent être examinés tels qu’ils ont été perçus par les employés de la banque à l’époque où l’incident est survenu. [ 33 ] Another principle governing a bank’s behaviour is that of non interference with its clients’ business transactions.

A bank does not oversee clients’ accounts; it is not required to determine the origin of funds deposited in its clients’ accounts, the nature of agreements between its clients and third parties or the extent of its clients’ obligations, unless exceptional circumstances are involved [4] .

As stated in Droit Bancaire [5] : La banque n’a pas a s’immiscer dans les opérations commerciales ou financière qui sont à l’origine des mouvements de fonds dont elle assure l’exécution, sinon dans des cas exceptionnels ou s’ils présentent un caractère manifestement illicite ou frauduleux… [ 34 ] In collecting instruments for depositors, a bank acts as a mandatary of its client, It must act quickly and respect norms and banking practices both nationally and internationally and make the proceeds of a collected instrument available to the depositor in a timely manner. [ 35 ] Banks have a practice of providing provisional credit to a customer’s account immediately with the full face amount of every item deposited and reimbursing itself when the item is paid by its drawee.

This practice, followed in approximately 99% of deposits allows for an efficient payment system [6] . To do otherwise, on the grounds that a cheque could possibly be fraudulent, would result in paralyzing the pay system. [ 36 ] There are exceptional situations where a bank must refuse to carry out an operation when fraudulent or manifestly illicit operations are involved.

It must also be more vigilant when certain situations arise, as for example the case where the instrument is from an unknown bank, the amount involved is unusual or a cheque made to the order of a business is to be deposited in a personal account: Elle doit refuser d’exécuter des opérations qui ont clairement une origine frauduleuse ou illégale. Un fonctionnement visiblement anormal du compte, des opérations manifestement illicites ou frauduleuses doivent éveiller sa méfiance et l’obliger à s’informer pour éclaircir ce qui est suspect [7] .…

[ 37 ] However, unless there are blatant indicators of fraud or irregularities, a bank’s obligation of prudence, pursuant to

article 1457 C.C.Q., does not require it to abstain from making available, to a client, the amount of a cheque deposited in the client’s account. The client’s duty of conduct: [ 38 ] A client also assumes certain obligations of prudence and diligence. Amongst a client’s obligations is that of taking reasonable measures to prevent fraud [8] and where he fails to take the requisite precautions, he can be prevented from exercising his recourse against the bank since his negligence was the cause of the loss.

The contractual obligations: [ 39 ] In the present case, in addition to the applicable banking principles, Plaintiff concluded a Business Banking Agreement, which sets out the parties’ rights and obligations. The following provisions are pertinent: You agreed that you are liable to us (…) for: (…)

c) for all instruments credited to you. 7. We may charge any of your accounts, even if that creates or increases an overdraft, with the amount of the following: a) (…)

b) any Instrument cashed or negotiated by us for you or credited to any of your accounts for which payment is not received by us … 9. We will periodically forward to you…a statement of your account…You will: (…) Carefully and promptly verify the completeness and correctness of each statement or update and immediately notify us is writing of any errors or omissions. 11. You will at all times have in place commercially reasonable procedures to prevent and detect losses due to (…) fraud (…) involving instruments (…). 12. Although we are liable for direct losses or damages caused by our negligence… In no event will we be liable for any loss or damage resulting from:

a) the actions, or the failure to act, of any other person. [ 40 ] The Business Banking Agreement stipulates that the client has an obligation to put in place reasonable measures to prevent fraud and provides for TD to charge back a client’s account when it fails to receive payment from the drawer, as TD does not assume liability for the acts of third parties.

ANALYSIS: [ 41 ] TD charged back $69,600 from Plaintiff’s account, namely the amount originally credited to its account, on the grounds that a cheque TD received and deposited to Plaintiff’s account was fraudulent.

It based its right to recover the funds on the contract it concluded with Plaintiff, which provides that TD can charge an account for an amount credited to an account when it fails to receive payment. [ 42 ] Plaintiff invokes estoppel [9] and refers to TD’s negligence, which led to Plaintiff’s false sense of security, alleging TD neglected to take elementary precautions with respect to the cashier’s check, including its failure to hold funds, its failure to verify the cheque despite fraud warnings on Plaintiff’s account and its failure to follow basic procedures.

TD’s conduct : [ 43 ] Plaintiff had suffered a previous attempt of fraud, which was caught by the bank. A fraud warning was placed on its file. Plaintiff submits that given the warning, TD should have called Plaintiff to determine whether the deposit was legitimate. [ 44 ] TD argued against its admissibility in evidence, claiming the warning was not pertinent, while Plaintiff argued that the previous attempt is germane and the warning relevant.

The evidence was admitted under reserve of the objection. [ 45 ] While the message lodged on Plaintiff’s profile is admissible in evidence given that it relates to Plaintiff’s account, the Court finds it is not relevant in this instance. The message on file indicates Fraudulent attempt made to wire funds manually . This refers to a request from a client to wire out funds.

When such a message is lodged, TD will generally verify with Plaintiff, by phone, any instructions to manually wire funds out. [ 46 ] In the present case, TD is not reproached for any outgoing wire transfer of funds; rather it is reproached for not verifying the cheque to be deposited to Plaintiff’s account, based on the warning on its file. However, as indicated above, the warning deals with funds transferred out and not the receipt of same. [ 47 ] Plaintiff points to TD’s failure to hold the funds. This argument is not retained.

A study carried out by the Association Canadien de paiement [10] found that, at any given day, less than 1% of deposits are held by banks. [ 48 ] Plaintiff also points to the Financial Services Terms, arguing that it forms part of Plaintiff’s financial services agreement with TD. Although Mrs.

Xu believed her commercial account and her personal account were the same, she admitted having opened the two accounts separately and at different times. [ 49 ] More importantly, the Hold Funds Policy contained in the Financial Services Terms clearly stipulates that this policy pertains to personal deposit accounts: Our Hold funds Policy – When you open a personal deposit account with us, we will advise you how our “hold funds policy” will impact you in your day-to-day banking… (The underlining is ours) [ 50 ] There is clearly no contractual basis requiring TD to hold funds deposited in Court 1’s account.

Moreover, the absence of a hold funds policy does not modify the situation; Plaintiff’s line of credit of $200,000 would allow it to transfer the requested sum of money to Dubai, even had a hold funds policy been in effect [11] . [ 51 ] Plaintiff raises the fact TD did not follow its policy of requiring an endorsement.

Its administrative manual indicates that cheques deposited to a business account are to be endorsed by the branch by means of the teller stamp, with the account number and transit number written on the back of the cheque. [ 52 ] The cheque deposited to Plaintiff’s account was stamped with a teller stamp. The account number and transit number were not inscribed on the back. According to Ms. Benitah, the branch manager, the inscription is for reference purpose only. The teller’s stamp constitutes the bank’s sign of endorsement.

The client’s signature is not required for a deposit. [ 53 ] Moreover, the cheque was accompanied by written instructions, addressed to TD’s Côte-Vertu branch, that the cheque be deposited to Court-1 Sports inc.’s account: the key elements were present, namely the client’s name, its account number and the branch number. [ 54 ] Plaintiff submits that TD made no effort to verify the cheque; it contends the manager’s claim, that the cheque in question did not justify verification, does not stand up to scrutiny. For Plaintiff, the cheque raises a red flag.

Plaintiff described it as coming close to mayday at Tiananmen square . [ 55 ] The amount of the cheque, however, is not excessive and would not draw the attention of TD, particularly considering that Plaintiff does 2.5 million dollars of business annually and has a monthly balance of approximately $200,000. [ 56 ] In addition, Plaintiff’s account is a commercial account. There is no hold on these accounts and commercial clients are considered sophisticated. As TD’s branch manager indicated, there is little or no interference with the affairs of such clients.

[ 57 ] Furthermore, the cheque was drawn on a known American bank. It was accompanied by instructions which contained the necessary elements to identify the payee and to deposit the cheque, namely the branch address and branch number, the name of the payee (the Plaintiff) and the payee’s account number. [ 58 ] The facts in this case differ from others where banks have been held responsible in instances of fraud.

The following are examples of such cases: [ 59 ] In Bédard [12] , after a bank draft of $1,500,000, issued by a Zimbabwe bank, was deposited in Bédard’s account, Bédard wire transferred substantial amounts to various companies. The draft was counterfeit.

The bank was held liable given the amount deposited, drawn on a bank in Zimbabwe, was disproportionate to the amounts held in Bédard’s accounts and the transaction was not in the normal course of his business. [ 60 ] The bank had assured Bédard the funds were immediately available, failing to respect its “case by case” hold funds’ policy. [ 61 ] In Legault [13] , cheques for considerable amounts, bearing false endorsements, were deposited in Legault’s trust account.

Before issuing two certified cheques, as requested by his clients, Legault was assured on three occasions the funds had been transferred to his account and were available, giving him a false sense of security. The bank failed to advise him the deposit was made by cheques, not bank transfers, although only the bank could be aware of this fact.

The bank’s negligence resulted from having provided erroneous information to Legault. [ 62 ] Other cases cited by the parties [14] , where there was detrimental reliance on an assurance given by a bank or manifest anomalies in an instrument, are distinguishable from the present case. [ 63 ] Plaintiff points to the deposit memo, which accompanied the cheque instructing TD to deposit the cheque.

Plaintiff maintains the memo is written in a gibberish language and instead of verifying the cheque, the bank called no one and made no effort to verify it. [ 64 ] The memo refers to the Deposition of the Enclosed Instrument.

It provides the account number, transit number and authorization number and then continues: Then, have the funds deposited direct into the Beneficiary A C: COURT-1-SPORTS INC., notified, That the insured $69,600.00 (Sixty Nine Thousand Six Hundred Dollars) payment has been deposited into their account as instructed. [ 65 ] While the text is not in the most articulate English, it is certainly comprehensible.

It indicates that an amount of $69,600 is to be deposited into the account of Court 1-Sports inc. and the key elements required for deposit are present. [ 66 ] For TD, the memo did not raise a red flag, particularly in light of the fact it instructed that the cheque be deposited into a payee’s account, with all the key elements present. Furthermore, the deposit caused no prejudice.

In contrast to other cases submitted by Plaintiff, TD did not advise Plaintiff that the funds were available nor did it give Plaintiff any assurances. [ 67 ] Plaintiff also maintains that TD’s contention that TD could not handle all of its deposits if it had to call clients, because of the volume of transactions, does not stand up to scrutiny. [ 68 ] As already indicated, banks have a duty to make proceeds of a collected instrument available within a reasonable period of time and to act expeditiously, particularly in the case of commercial transactions.

To require it to contact a client, when a bank does not note any irregularities, would be to thwart the effectiveness of the banking system. [ 69 ] Such an approach was adopted in 9083-2957 Québec inc . vs. Caisse populaire Desjardins Rivière-des Prairies [15] , where the bank was reproached for failing to detect the authenticity of the signature on a number of cheques, which was ultimately found to have been forged: On est en présence ici d’un système bancaire commercial où, par définition, les transactions doivent s’effectuer avec célérité et où la bonne foi doit se présumer.

Exiger des institutions financières qu’elles mettent en place des systèmes complexes et indûment onéreux, et ce, pour contrer un phénomène somme toute assez rare – une ou deux signatures douteuses par mois…serait prétendre tuer une mouche avec un marteau-pilon….Vaut mieux, en dernière analyse, se fier aux clients eux-mêmes à qui les chèques sont retournés à tous les mois et qui sont plus en mesure que quiconque de déceler les irrégularités, si irrégularités il y a… [ 70 ] In the above case, the Court indicated that, in final analysis, customers are better placed than anyone else to detect irregularities, if any irregularities occur. [ 71 ] In Meridian Credit Union Ltd . vs.

Grenville-Wood [16] , where a customer unknowingly deposited a materially altered cheque that was then dishonoured by the payor, the Court of Appeal of Ontario also considered the customer to be best situated to prevent the loss and to make inquires as to the validity of the cheque purportedly issued to him.

The Appeal Court held that a collecting bank, in acting as the payee’s agent, assumes no liability with respect to the validity of the bill of exchange and had no duty to warn its customer that, although the cheque had cleared, the credit could not be considered final and might later be reversed if the cheque was dishonoured by the drawee bank. [ 72 ] In the present case, in retrospect, the cheque and deposit memo may raise some questions when each word is examined and analyzed in detail but, as indicated in Droit Bancaire [17] , the events must be examined, as they were perceived by the bank’s employees, at the time the incident occurred.

After noting all the relevant elements required to process the cheque for deposit, the bank acted in a manner consistent with standard banking practice. It deposited the cheque into Plaintiff’s account, making the funds available in an expeditious manner. For all the reasons outlined above, in the view of the undersigned, TD was not negligent.

Plaintiff’s conduct : [ 73 ] The Court considers that Plaintiff was negligent in its handling of the entire affaire. Plaintiff concluded a sale with Lateef, a client situated in Dubai, and requested that funds from its account be sent by wire transfer to Dubai.

Plaintiff provided Lateef with its account number and banking details in order that he route funds into Plaintiff’s account. [ 74 ] When advised of an alleged error by Lateef, who in his persistent calls, claims he erroneously transferred $69,600 to Plaintiff’s account, Plaintiff bowed to his pressure and promised to return the excess funds. [ 75 ] Plaintiff has a wire notification service with TD, informing Plaintiff by e-mail when a wire transfer comes in. In addition, its account statement clearly indicates when money credited to its account is a deposit and when it consists of a wire transfer.

This information regarding transactions is available on a daily basis. [ 76 ] Plaintiff contended it waited for the funds to arrive. Ms. Xu asked David Chi, Plaintiff’s accountant, every day, to check Court- 1’s statement of account to see if the money had been credited to its account. He informed Ms. Xu on September 23 rd that the money had been received. She assumed Lateef had sent the funds by a wire transfer. [ 77 ] However, despite having a wire notification service, Plaintiff did not verify the means of payment. Ms. Xu did not question Mr.

Chi as to how payment was made; she did not verify Plaintiff’s statement of account, which specifies whether funds consisted of a wire transfer or a deposit and she did not contact TD to advise the bank she was expecting an incoming wire of $69,600. While she relied on Mr. Chi to check, there is no detrimental reliance, by Plaintiff, on TD. [ 78 ] A simple verification would have established the mode of payment, whether by verifying its e-mails which show when a wire transfer is made or by looking at the account statement, which clearly shows that the $69,600 is a deposit; it is not indicated as “WIRE”.

Plaintiff had it within its power to protect itself at the time of acquiring the deposit, but failed to make the necessary verifications or inquiries. [ 79 ] Plaintiff then transferred $65,167 (namely the alleged overpayment less the cost of the goods sold) to John Joseph General Trading LLC, in Dubai, as requested by Lateef. Plaintiff does not know this company. Ms. Xu testified that it was the holding company of Lateef’s enterprise Latrade. However, in the examination before plea of Ms.

Xu, she admitted that she had not asked Lateef why he asked her to return the funds to another company rather than to Latrade Supplies.

She did not check to determine who John Joseph General Trading was. [ 80 ] In sum, the Court considers that Plaintiff showed gross negligence in wiring funds to a third party, it did not know, without first taking basic precautions to assure that it had received a wire transfer from Lateef or from his company. [ 81 ] Plaintiff submits that should TD submit the argument of novas actus interveniens , namely that Plaintiff interrupted the chain of events and therefore removes TD’s liability, such an argument is not valid. [ 82 ] According to Plaintiff, it would not have wired funds from its account unless there was money in it.

Plaintiff contends its decision to wire money out is not independent of the bank’s fault of crediting Plaintiff’s account. Plaintiff submits “ But for ” TD’s fault, Plaintiff would not have returned the funds and the fraud would not have taken place. [ 83 ] The Court does not agree.

The loss stems from Plaintiff’s transfer of money by rapid wire service to a company in Dubai, unknown to Plaintiff and which it never verified, after Plaintiff neglected to verify whether the alleged funds, from Lateef’s company, had in fact been credited to its account by a wire transfer and after failing to verify or obtain any assurance from TD that the funds were available in its account. [ 84 ] Even if TD committed a fault, the posterior fault committed by Plaintiff was more important than the alleged initial fault of the bank, and had the effect of interrupting the causal link between the initial fault, if any, of TD and the prejudice Plaintiff suffered.

As the Court explained in Lacombe et al . vs André et al . [18] : Si l’on tient alors comme hypothèse qu’il s’agit de deux fautes successives indépendantes et étalées dans le temps, mais ayant contribué au préjudice, il aurait fallu selon la jurisprudence que le juge se prononce sur la gravité respective de celles-ci pour déterminer qui était responsable. Dans cette hypothèse en effet, si la seconde faute est plus sérieuse, plus grave que la première ou, dans certains cas, égale à celle-ci, elle vient oblitérer les effets de la première et doit être retenue comme ayant seule causé la totalité du préjudice.

Il y a alors une authentique rupture du lien de causalité, la cause efficiente et seule retenue du préjudice étant la dernière dans le temps. [ 85 ] Finally, the Court seriously considered the case of Pinso Ltée [19] , where the Court held both parties liable for the damages. After a great deal of reflection and although the undersigned is fully conscious Plaintiff’s distress of having been defrauded and although Plaintiff had able counsel, the Court is not of the view that the responsibility should be shared since it does not find TD responsible for the damages suffered.

FOR THESE REASONS, THE COURT: DISMISSES the motion to introduce proceedings;

THE WHOLE , with costs. __________________________________ SUZANNE HANDMAN, J.C.Q. Me Jay Turner Oiknine et Ass. Attorney for Plaintiff Me Alberto Martinez Deslauriers & Cie., avocats Attorney for Defendant Date of hearing: January 17 and 18, 2013