Accursi v. Hong Kong Bank of Canada

Accursi v. Hong Kong Bank of Canada Collection Decisions of the Court of Appeal Date 1999-07-19 Docket numbers C28096 Judges Catzman, Marvin Adrian; Labrosse, Jean-Marc; Moldaver, Michael James Subject Civil Decision Content DATE: 19990719 DOCKET: C28096 COURT OF APPEAL FOR ONTARIO RE: GARRY ACCURSI, BERNICE AVRUSKIN, JENNIFER BAUMAN, JOHN BAUMAN, STEVEN BLITZER, SHLOMO BRENNER, CHRISTOPHER BURNETT, JAMES CALDWELL, JOHN CECCHI, EDWARD CHAN, ERIK CHAN, JULIA CHING, DONALD CORMACK, JOHN EMMETT, ERIK ERIKSEN, LORNE FINKELSTEIN, STANLEY FLAX, ARI GOLD, WAYNE GREGORY, BARRY HABERMAN, EDDY HANSEN, THOMAS HANSEN, BAHIR HASHAM, ERNEST JESSEN, BRIAN JONES, CARL JOSS, JERRY KAPACH, MARK KLEIMAN, ARNOLD KRAVETZ, HENRY KREIGER, SHARON KWOK, ANDY LAM, BERNARD LAMB, SEIGFRIED LANGHAMMER, NICK LAVALLE, DONNA LAVALLE, HUGO LAW, ALLAN LEVY, DAVID LITNER, NIZAR MARANI, MOBINA NIZAR, IRA MARDER, ANNE MARRIOTT, PETTER MARRS, JACK MICAY, RODNEY MORRELL, CHARLES NAGEL, ANTHONY NG, HUGH O'GORMAN, MICHAEL ORAVEC, WILLARD OXTOBY, SAMUEL PACKER, MARGARET PASKOE, JOHN PICKERING, JOHN PORTO, WYLEY POWELL, AGNES REICHER, ALLAN REIN, T. REBANE, HOWARD ROSEN, JOHN ROWE, ABRAHAM RUBIN, FRANCIS SAM, LOUIS SCHEINMAN, THELMA SHORE, VICTOR SHORE, HOWARD SINCLAIR-JONES, LORNE WAYNE SOKOL, TOM STEVENS, CHRIS STOUTE, J.R. TARNOWSKI, BORIS ULCAR, GREGORY USHER, CASPER VERRE, GREGORY WALKER, GREGORY WELLS, THOMAS WHITE, DOUGLAS WILLIAMS, DAVID WONG, TAT-KWAN WONG, TAT-YING WONG, JOHN WRIGHT and MORTON YABLO (Appellants) - and - HONGKONG BANK OF CANADA, THE TORONTO-DOMINION BANK, THE BANK OF MONTREAL, THE ROYAL BANK OF CANADA, SUN LIFE TRUST COMPANY OF CANADA, METFIN PROPERTIES (1987) LIMITED PARTNERSHIP, METFIN PROPERTIES (1988) LIMITED PARTNERSHIP, METFIN PROPERTIES (1989) LIMITED PARTNERSHIP, METFIN (WESTERN OPPORTUNITIES) LIMITED PARTNERSHIP, METFIN (CALGARY SHOPPING CENTRE) LIMITED PARTNERSHIP, METFIN (YORK CORPORATE CENTRE, a.k.a. 100 YORK BLVD.) LIMITED PARTNERSHIP, METFIN (EDMONTON SHOPPING CENTRE) LIMITED PARTNERSHIP, METFIN (TORONTO COMMERCIAL PROPERTIES) LIMITED PARTNERSHIP (Respondents) BEFORE: CATZMAN, LABROSSE and MOLDAVER JJA. COUNSEL: Leslie A. Vandor, Q.C. and Jeffrey C. Barnabe, Q.C., for the appellants Melanie A. Yach, for the respondent Royal Bank of Canada Elizabeth K. Ackman and Tammara Farber, for the respondents The Toronto-Dominion Bank and Sun Life Trust Company of Canada Joshua J. Siegel, for the respondent Bank of Montreal Melissa J. Kennedy, for the respondent Hongkong Bank of Canada HEARD: July 14 and 15, 1999 On appeal from the judgment of Madam Justice G. Epstein dated September 2, 1997 ENDORSEMENT [1] This is an appeal from the judgment of Epstein J. who, on a motion for summary judgment, dismissed the appellants’ claim and granted the respondent banks (“the banks”) judgment on their counterclaims against certain appellants. [2] At the outset, it is important to note the basis on which this case was argued, both before the motions judge and in this court. The individual claims of the plaintiffs/appellants are not to be considered separately on their respective merits. Counsel for the appellants made it clear that the case was being argued on an all or nothing basis: all the claims go to trial or all of them are dismissed. This explains some of the language of the motions judge when she made reference to: § "most of the plaintiffs are sophisticated and highly educated"; § "the plaintiffs admitted in most cases"; and § "for the most part, there was no direct contact of any sort between the Investors and representative of the banks". [3] The appellants are a group of investors in limited partnerships promoted by the Metfin group of companies. The banks provided financing to the appellants for the purpose of investing in the tax-shelter investments. The appellants brought their action to rescind the loan transactions and the banks counterclaimed for amounts due under certain loans. The appellants’ action against Metfin was discontinued. [4] In conjunction with the loan transactions, the appellants executed documents including, but not limited to, promissory notes, directions, powers of attorney, waivers, acknowledgements and disclosure letters. [5] As a result of their investments, some appellants realized deductions in their taxable income and some received returns on their investments. However, when the recession hit, these tax- driven investments lost a substantial amount of their underlying values. [6] In our view, the evidence led by the appellants in response to the banks’ motion for summary judgment was highly questionable as it contained many omissions and inaccuracies. We are also of the view that all the issues raised by the appellants relating to misstatement or misapprehension of evidence by the motions judge have been satisfactorily answered by the respondents. [7] The appellants have alleged that: § the transactions were in violation of the Securities Act; § there was an agency relationship between Metfin and the banks; and § the banks owed a fiduciary obligation to the appellants and breached that obligation. The remaining allegations relating to Metfin not being a properly constituted entity within the meaning of the Ontario Business Corporations Act and that the transactions were made in contravention of the Condominium Act and the Ontario New Home Warranties Act were abandoned. [8] The motions judge found that there was no factual evidence for the argument that there had been a violation of the Securities Act and that there was in fact compliance with the Act. She also found that in any event, it was not established that the banks had actual knowledge of such failure. [9] With respect to the agency argument, the motions judge concluded that the appellants failed to demonstrate an agency relationship between the banks and Metfin. (Indeed, in our view, the evidence showed that for the purpose of the loan transactions, the appellants made Metfin their agent.) She also found that there was no evidence of any misrepresentation upon which the appellants may have relied in making their decision to invest. [10] Finally, with respect to the argument that the banks owed a fiduciary obligation to the appellants and that the banks breached that obligation, the motions judge found that a fiduciary obligation did not exist and she found that the appellants had failed to advance any evidence to demonstrate special circumstances to establish such a relationship. [11] With respect to all three issues, the motions judge concluded that they raised no genuine issue for trial. [12] Recognizing that this was a motion for summary judgment, we are satisfied that the motions judge was entitled to make the findings of fact that she did. Her findings and conclusions are all supported by the evidentiary record before her and we see no basis to interfere with her decision. [13] Accordingly, the appeal is dismissed with costs.