www.lexpert.ca 23
THIS CASE originated in a fraud involving
the Caribbean-based Stanford International
Bank. e bank's primary business was
selling high-yield certificates of deposit
to high-net-worth clients. e Toronto
Dominion Bank had a relationship with
Stanford International. TD was responsible
for receiving and disbursing funds from and
to purchasers of the certificates of deposit
until Stanford International collapsed and
was liquidated.
Stanford International's joint liquidators
sued TD, alleging it was liable for knowing
assistance in breach of fiduciary duty and
was negligent in providing services.
e trial judge dismissed the action, finding
TD lacked knowledge of the fraud and was
not reckless or wilfully blind. e judge ruled
there was insufficient proximity for a novel
duty of care. e liquidators challenged the
negligence claim's dismissal, and the Ontario
Court of Appeal dismissed their appeal,
of their customers.
He adds that McDonald v. Toronto-
Dominion Bank also stood out for the "sheer
size of the claim."
"e claim of US$5 billion put this case
in a different category. It was clearly going
to be a high-stakes case, no matter how it
turned out."
MCDONALD V. TORONTO-DOMINION BANK,
2022 ONCA 788
• Mark McDonald of Grant Thornton (Brit-
ish Virgin Islands) Ltd. and Hugh Dickson
of Grant Thornton Specialist Services
(Cayman) Ltd., acting together herein
in their capacities as Joint Liquidators
of Stanford International Bank Ltd. >
Bennett Jones LLP > Lincoln Caylor,
Maureen M. Ward, Nathan J. Shaheen,
Alexander C. Payne, Shaan P. Tolani,
Thomas Feore
• Toronto-Dominion Bank > McCarthy
Tétrault LLP > Geoff R. Hall, Junior Siri-
var, Christine Wadsworth, Alison Bond,
Erin Chesney, Jacob Klugsberg
CLIENTS > FIRMS > LAWYERS
agreeing that TD and Stanford International
did not fall within an established or analogous
proximity category.
According to Geoff Hall, a partner at
McCarthy Tétrault LLP who acted on the
case, the ruling raises two key issues.
One concerns the scope of the duty of care
banks owe their customers.
"e Court of Appeal decision made clear
that the mere existence of a banking relation-
ship isn't enough. You have to look at it at a
more granular level," he says.
Hall says it is the type of relationship that
matters. He says that opening a chequing
account with a bank does not give the bank
a duty of care concerning all that customer's
investments, nor does having a safety deposit
box with the bank obligate that bank to ensure
that the customer is not the victim of fraud.
Secondly, Hall says the ruling clarifies
that deep-pocketed defendants and banks
are not the insurers, auditors, or regulators
