AIG Insurance Company of Canada v. Priyance Hospitality Inc.
The appeal was dismissed because the funds were paid to reduce a legitimate debt to a trustee who was lawfully entitled to receive them, who had no knowledge of the fraud and who altered its position in good consideration by deferring its receivership application; on these facts the appellant failed to establish...
Source-derived case information.
- Citation
- 2017 ONCA 595
- Parties
- Appellant: AIG Insurance Company of Canada; Applicant (respondent in Appeal): Owen Rogers, Trustee; Respondent: Priyance Hospitality Inc.
- Court
- Court of Appeal for Ontario
- Jurisdiction
- Canada
- Judgment Date
- 10 July 2017
- Procedural Posture
- Collection / Appeal From Motion Judgment
- Outcome
- Appeal dismissed
- Legal Topics
- Mistake of Fact, Lack of Consideration, Unjust Enrichment, Equitable Subrogation, Constructive Trust, Alteration of Position
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
AIG Insurance Company of Canada
Appellant
Owen Rogers, Trustee
Applicant (respondent in Appeal)
Priyance Hospitality Inc.
Respondent
Procedural Posture
Collection / Appeal From Motion Judgment
Legal Issues
- 1 Whether appellant could recover $600,000 paid to the trustee as a result of alleged fraud
- 2 Whether the defence of mistake of fact barred the trustee from retaining the funds
- 3 Whether lack of consideration or unjust enrichment supported restitution to the appellant
Ratio Decidendi
The appeal was dismissed because the funds were paid to reduce a legitimate debt to a trustee who was lawfully entitled to receive them, who had no knowledge of the fraud and who altered its position in good consideration by deferring its receivership application; on these facts the appellant failed to establish mistake of fact or entitlement to equitable remedies.
Court Disposition
Appeal dismissed
Orders
- Appeal dismissed
- Respondent entitled to costs of the appeal fixed at $17,500 inclusive of disbursements and HST
Full Case Text
Judgment text and source record
1 paragraphs
AIG Insurance Company of Canada v. Priyance Hospitality Inc. Collection Decisions of the Court of Appeal Date 2017-07-10 Neutral citation 2017 ONCA 595 Docket numbers C63207 Judges MacPherson, James C.; Cronk, Eleanore Ann; Benotto, Mary Lou Subject Civil Decision Content COURT OF APPEAL FOR ONTARIO CITATION: AIG Insurance Company of Canada v. Priyance Hospitality Inc., 2017 ONCA 595 DATE: 20170710 DOCKET: C63207 MacPherson, Cronk and Benotto JJ.A. BETWEEN Owen Rogers, Trustee Applicant (Respondent in Appeal) and Priyance Hospitality Inc. Respondent Reid Lester, for the appellant, AIG Insurance Company of Canada David S. Ward and Erin Craddock, for the respondent, Owen Rogers, Trustee Heard: July 7, 2017 On appeal from the judgment of Justice Ruth E. Mesbur of the Superior Court of Justice, dated December 14, 2016. REASONS FOR DECISION [1] The appellant, AIG Insurance Company of Canada, appeals from the judgment of Mesbur J. of the Superior Court of Justice dismissing AIG’s motion for the recovery of $600,000 which has been held back from distribution by the Receiver in the underlying proceeding. In support of its position, the appellant advances arguments grounded in mistake of fact, lack of consideration, unjust enrichment, equitable subrogation and constructive trust. [2] We do not accept the appellant’s submissions on these issues. We agree with the motion judge’s conclusion. The funds in question were paid to the respondent trustee to reduce a legitimate outstanding debt. It is accepted that the trustee, who had no knowledge about the fraud and was not positioned to discover it, was lawfully entitled to receive the funds. Further, in good consideration of the payment, the trustee altered its position by agreeing to defer its receivership application for an additional two weeks even though, in addition to all the debtor’s other problems, the bailiff had taken seizure actions to collect outstanding municipal taxes. In the context of these facts, the appellant did not establish the defence of mistake of fact. [3] The appeal is dismissed. The respondent is entitled to its costs of the appeal fixed at $17,500, inclusive of disbursements and HST. “J.C. MacPherson J.A.” “E.A. Cronk J.A.” “M.L. Benotto J.A.”