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
'They needed people inside Air Canada:' Police announce arrests in Pearson gold heist
Police say one former and one current employee of Air Canada are among the nine suspects that are facing charges in connection with the gold heist at Pearson International Airport last year.
House admonishes ArriveCan contractor in rare parliamentary show of power
MPs enacted an extraordinary, rarely used parliamentary power on Wednesday, summonsing an ArriveCan contractor to appear before the House of Commons where he was admonished publicly and forced to provide answers to the questions MPs said he'd previously evaded.
Leafs star Auston Matthews finishes season with 69 goals
Auston Matthews won't be joining the NHL's 70-goal club this season.
Trump lawyers say Stormy Daniels refused subpoena outside a Brooklyn bar, papers left 'at her feet'
Donald Trump's legal team says it tried serving Stormy Daniels a subpoena as she arrived for an event at a bar in Brooklyn last month, but the porn actor, who is expected to be a witness at the former president's criminal trial, refused to take it and walked away.
Why drivers in Eastern Canada could see big gas price spikes, and other Canadians won't
Drivers in Eastern Canada face a big increase in gas prices because of various factors, especially the higher cost of the summer blend, industry analysts say.
Doug Ford calls on Ontario Speaker to reverse Queen's Park keffiyeh ban
Ontario Premier Doug Ford is calling on Speaker Ted Arnott to reverse a ban on keffiyehs at Queen's Park, describing the move as “needlessly” divisive.
'A living nightmare': Winnipeg woman sentenced following campaign of harassment against man after online date
A Winnipeg woman was sentenced to house arrest after a single date with a man she met online culminated in her harassing him for years, and spurred false allegations which resulted in the innocent man being arrested three times.
Woman who pressured boyfriend to kill his ex in 2000s granted absences from prison
A woman who pressured her boyfriend into killing his teenage ex more than a decade ago will be allowed to leave prison for weeks at a time.
Customers disappointed after email listing $60K Tim Hortons prize sent in error
Several Tim Horton’s customers are feeling great disappointment after being told by the company that an email stating they won a boat worth nearly $60,000 was sent in error.