Court dismisses statutory misrepresentation claim against credit union board in landmark decision

For the first time, the Ontario Superior Court of Justice released a decision that considered issues of statutory misrepresentation in an offering statement under the Credit Unions and Caisses Populaires Act, 1994[1] (Act). Polla v. Croatian (Toronto) Credit Union also provides extensive guidance on issues of directors’ and officers’ liability more generally. There is very limited jurisprudence in this area, and this landmark decision is expected to provide valuable guidance to boards and insurers on risk prevention. This insight provides a high-level overview of the decision.

Facts

The plaintiff, Ferdinando Polla (Polla), invested CA1 $5 million in the Croatian Credit Union (CCU) after the struggling credit union filed an offering statement in order to raise funds.

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Khalid v 2262351 Ontario Inc.: Third party discoverability grounded in reasonability

Introduction

In negligence-based actions, defendants routinely issue third party claims for contribution and indemnity to reduce their liability exposure. As a result, the plaintiff can commence a claim believing certain defendants to have caused the plaintiff’s loss, but, after successive third party claims, learn that several other persons might have contributed to the loss. To increase the prospect of recovery, the plaintiff often moves to add these third parties as defendants, long-after the impugned act or omission took place.

In these circumstances, third parties should consider whether to oppose a motion to be added as a defendant pursuant to section 21(1) of the Limitations Act, 2002:

21 (1) If a limitation period in respect of a claim against a person has expired, the claim shall not be pursued by adding the person as a party to any existing proceeding.

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Covenants to insure can bar action against other named insureds

In a short decision, Jacobs v. Leboeuf Properties Inc., 2018 ONSC 4795, the Ontario Superior Court of Justice dismissed an Owner’s claim against a General Contractor on the basis that the Owner’s contractual obligation to obtain insurance for the project and include the General Contractor as named insured (the covenant to insure) relieved the General Contractor from liability for faulty workmanship.

The Owner alleged that the General Contractor negligently, and in breach of the contract between the parties, performed work that caused damage to project property. The Owner sought to recover from the General Contractor the cost to correct and complete the allegedly negligent work.

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