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Fraud - Civil. Sakab Saudi Holding Company v. Al Jabri
In Sakab Saudi Holding Company v. Al Jabri (Ont CA, 2026) the Ontario Court of Appeal dismissed an appeal, here brought against a Divisional Court appeal ruling that mostly upheld a Superior Court ruling that dismissed a motion "requiring the respondents to produce two categories of information", these being law firm trust ledgers and unredacted bank statements.
The court considers the 'broad concept' of criminal fraud, here in the context of assessing the crime-fraud exception to solicitor-client privilege:The Broad Concept of Fraud in Criminal Law
[87] Given the breadth of the concept of fraud in criminal law, it is also unnecessary to import other uses of the term into the exception in order for the exception to have sufficient breadth to remain faithful to its rationale – that certain communications fall outside the proper scope of employment of a lawyer such that they are not privileged, because attaching privilege to them would undermine the administration of justice.
[88] Section 380(1) of the Criminal Code, R.S.C. 1985, c. C-46 provides that everyone commits fraud “who, by deceit, falsehood or other fraudulent means … defrauds the public or any person … of any property, money, or valuable security or any service”. “Defrauds” is not defined in the Criminal Code and “[c]ourts, for good reason, have been loath to attempt anything in the nature of an exhaustive definition of ‘defraud’ but … two elements are essential, ‘dishonesty’ and ‘deprivation’”: R. v. Olan et al., 1978 CanLII 9 (SCC), [1978] 2 S.C.R. 1175, at p. 1182. This criminal concept of fraud is broader than fraudulent misrepresentation, such as that required to establish deceit or civil fraud: Olan, at p. 1181; Bruno Appliance and Furniture, Inc. v. Hryniak, 2014 SCC 8, [2014] 1 S.C.R. 126, at para. 21.[7]
[89] Accepting that “it is no part of the professional duty of a solicitor either to take part in the concoction of fraud, or to advise his client how to carry through a fraud” (Campbell, at para. 59, citing O’Rourke, at p. 621), a communication about how to concoct or carry out a fraud would fall within the exception as it would fall within the criminal law’s broad understanding of that term. Indeed, it is difficult to imagine a client communicating to a lawyer that they would like advice to concoct a fraud, but only a civil one. And since, as explained below, the exception applies to the communication, it does not matter what type of proceeding later occurs. . Natario v. RBC Insurance Company of Canada
In Natario v. RBC Insurance Company of Canada (Ont CA, 2026) the Ontario Court of Appeal dismissed a motion to quash an appeal on final versus interlocutory 'appeal routes' grounds.
Here the court considers civil fraud, here as a pleadings amendment issue:[18] In this case, the motion judge denied the insurers leave to amend the pleadings to plead civil fraud.
[19] Civil fraud differs from the defences already pleaded by the insurers, including defences based on specific provisions of the policy and common law breach of the duty of good faith.
[20] The Rules require that affirmative defences be specifically pleaded to avoid surprise at trial. The particulars should set out how the elements of fraud are met and the same facts may support different forms of relief depending on the defence pleaded: Rules of Civil Procedure, R.R.O. 1990, Reg. 194, r. 25.06(8); A.A. v. Macri, 2010 ONCA 99, at para. 37; Teefy Developments (Bathurst Glen) Limited v. Sun, 2021 ONCA 870, at para. 14. Civil fraud requires proof of a false representation, knowledge of the falsehood or recklessness, reliance on the representation, and a resulting loss: Bruno Appliance and Furniture, Inc. v. Hryniak, 2014 SCC 8, [2014] 1 S.C.R. 126, at paras. 17-21.
[21] The moving party concedes that civil fraud is a distinct defence and that the motion judge denied the insurers the right to assert civil fraud.
[22] The order refusing the proposed amendment therefore forecloses a new substantive defence. Accordingly, an appeal lies as of right to this court: Courts of Justice Act, s. 6(1)(b).
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