On
The case involved a contract between Foodinvest and RBC for the use of RBC Express, a self-service transfer facility. Foodinvest alleged that RBC failed to advise Foodinvest that a Polish bank had informed RBC that there was a suspected fraud in relation to two transactions in which Foodinvest had used RBC Express to transfer funds to that Polish bank.
The Motion Judge at first instance (2018 ONSC 7742) held that RBC did not have a duty of care to advise Foodinvest of the messages it received from the Polish bank. Given that establishing a duty of care is a prerequisite for establishing negligence, the Motion Judge granted RBC's summary judgment motion. Foodinvest appealed and the
The Court of Appeal agreed with the motion judge's duty of care analysis, relying on the principles from the
This decision is helpful for clarifying to service providers, such as financial institutions, the lengths they have to go to properly execute their legal obligations. It makes commercial sense that a service provider should not be responsible for ensuring that a customer's underlying business decisions are appropriate if this is not part of the agreed upon scope of services to be provided to the customer. The key takeaway for both service providers and customers is to ensure that the extent of the services to be provided is clearly defined in their governing contracts.
Case Information
Docket: C66522
Date of Decision:
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