In Natario v. RBC Insurance Company of Canada, 2006 ONCA 263, the Court of Appeal refused to quash an appeal of an order preventing insurers from adding civil fraud defence. The insurers sought to rely on misrepresentations admitted by the insureds over a span of several years to deny coverage and eventually moved in 2025 for leave to amend their statement of defence to include a civil fraud defence. The motion judge dismissed the insurers’ motion on the basis that issuing leave to amend the pleadings would result in non-compensable prejudice to the insureds. The Court of Appeal held that the order was final because it deprived the insurers of the ability to advance a distinct substantive defence and that civil fraud was not duplicative of the insurers’ existing policy-based and good faith defences, but rather separate and distinct. The Court of Appeal relies on the Rules of Civil Procedure … Read More
Carelessness is Not Enough to Amount to Civil Fraud the Court of Appeal Confirms
In Bank of Montreal v. Makhija, 2026 ONCA 221, the Ontario Court of Appeal confirmed that civil fraud requires proof of knowing or reckless misrepresentation and reliance and will not be found where the defendant reasonably believed the transaction was legitimate and did not make the misrepresentation relied upon. The Appellant, the Bank of Montreal (“Bank”), appealed the application judge’s findings that the Respondent, Master Manoj Makhija (“Makhija”) did not prepare or sign the Personal Financial Statement and that Makhija reasonably believed that the information provided to the Bank was truthful at the time of applying for a loan and credit facilities for his company, Seven Colors Entertainment Ltd. Makhija asserted that he himself had been duped by third parties who orchestrated a scheme to obtain financing for a printing business. Makhija asserted that he believed the printing business would go ahead and that the loan was for a legitimate … Read More