New Brunswick can't sue auditor, top court rules
New Brunswick cannot sue accounting firm Grant Thornton over an allegedly flawed audit which led the province to backstop hefty loans to a company that soon ran into financial trouble, the Supreme Court of Canada has ruled.
In a 7-0 decision Thursday, the high court concluded the province did not file its claim against Grant Thornton within the allowable time limit.
Events in the case began when the Atcon group of companies secured $50 million in loan guarantees from the province after Grant Thornton carried out an audit of Atcon's financial statements for the fiscal year ending Jan. 31, 2009.
Atcon ran out of working capital four months later, prompting the bank that loaned the money to seek the total amount of the guarantees, which the province paid in early 2010.
The province hired a second auditor, which found in a February 2011 draft report that Atcon had considerably overstated its financial position. A final report was completed in November 2012. The province took court action against Grant Thornton in June 2014 for its alleged negligence on the first audit.
Grant Thornton disputed the allegations and moved to have the action tossed out, arguing it came too late.
A judge allowed Grant Thornton's motion to halt the action on the basis that more than two years had passed since the province had discovered the relevant facts of its claim, but the decision was overturned by the province's court of appeal.
Writing for a majority of the Supreme Court, Justice Michael Moldaver said the appeal court had adopted too high a standard for triggering the start of the two-year time-frame set out in provincial law.
A claim is discovered when the plaintiff has knowledge of the material facts upon which "a plausible inference of liability" on the defendant's part can be drawn, Moldaver wrote.
"It follows from this standard that a plaintiff does not need knowledge of all the constituent elements of a claim to discover that claim."
Moldaver said he was satisfied that New Brunswick knew or ought to have known by February 2011 that Grant Thornton might be liable, yet the province did not go to court until more than three years later.
The Supreme Court set aside the appeal court judgment and restored the initial judge's decision to end the province's action.
This report by The Canadian Press was first published July 29, 2021.
CTVNews.ca Top Stories
Deaths of 4 people on Sask. farm confirmed as murder-suicide
The deaths of four people on a farm near the Saskatchewan village of Neudorf have been confirmed a murder-suicide.
Multiple bridges in Calgary shut down for police incident
Calgary police have shut down a number of bridges into and out of the downtown core as officers deal with a distraught individual.
Sunshine list: These were the Ontario public sector's highest earners in 2023
Ontario released its annual sunshine list Thursday afternoon, noting that the largest year-over-year increases were in hospitals, municipalities, and post-secondary sectors.
Why some Christians are angry about Trump's 'God Bless the USA' Bible
Former U.S. President Donald Trump is officially selling a copy of the Bible themed to Lee Greenwood’s famous song, 'God Bless the USA.' But the concept of a Bible covered in the American flag has raised concern among religious circles.
George Washington family secrets revealed by DNA from unmarked 19th century graves
Genetic analysis has shed light on a long-standing mystery surrounding the fates of U.S. President George Washington's younger brother Samuel and his kin.
Baby boom amongst nurses leads to maternity ward closure in Listowel, Ont.
The emergency room at Listowel’s hospital is open today, but come summer, their obstetrics unit will be temporarily closing its delivery rooms.
Humboldt Broncos bus crash survivor qualifies Canada for Paralympics in rowing event
Former Humboldt Broncos goaltender and bus crash survivor Jacob Wassermann has qualified Canada for a rowing event for the 2024 Paralympic games in Paris.
Krispy Kreme doughnuts coming to McDonald's in U.S., but not Canada
Canadians will be missing out on a sweet new partnership between McDonald's and Krispy Kreme, which will see doughnuts available at McDonald's locations across the U.S. by the end of 2026.
'We won't forget': How some Muslims view Poilievre's stance on Israel-Hamas war
A spokesman for a regional Muslim advocacy group says Conservative Leader Pierre Poilievre's stance on the Israel-Hamas war could complicate his party's relationship with Muslim Canadians.