Summary judgment is not available where, based on glaring inconsistencies, reasonable inquiries should have been made

Midas Investment Corp. v. Bank of Montreal
2016 CarswellOnt 7997
Ontario Superior Court of Justice

Business associations --- Specific matters of corporate organization — Directors and officers — Duty to manage — Power and authority — Indoor management rule

Plaintiff alleged that it was defrauded of over $3 million by two men, K and C — K was officer and shareholder of plaintiff — Plaintiff sued defendant bank on allegation that bank was negligent in allowing K and/or C to open and use account in name of plaintiff — This account was used to deposit, and then distribute, funds that were derived from alleged mortgage fraud committed by K and C against plaintiff — Bank brought motion for summary judgment dismissing action against it, relying on indoor management rule — Motion dismissed — Court was not satisfied that it could, by way of motion, justly and fairly dispose of central issue in case — Whether there was sufficient evidence in specified months to put reasonable bank on notice that further inquiry was required before approving opening and operation of corporate account required full exercise of discovery rights and viva voce evidence of those directly involved in bank's communications with K and C and review and approval of requisite documentation.