The Bank of Montreal was successful in defending a 10-year action against it by Leona Chitel. Justice Boyko dismissed the action against the bank and granted judgment on the bank’s counterclaim. Costs of $200,000 were awarded to the bank, and prejudgment interest was fixed at approximately $225,000. Reasons for judgment were released on May 23, 2002 and supplementary reasons for judgment were released on June 26. The court’s disposition of costs and interest was on September 19.
Chitel alleged that the bank had knowingly participated in a breach of fiduciary duty against her by her joint venturer, Anglo York Industries Limited and its principal the late Vincent Paul, by selling to them under power of sale her half interest in a farm property. The property was sold to Anglo York for $200,000 and was subsequently resold two years later for approximately $3.9 million. The bank counterclaimed and Chitel dropped her action against Anglo York and Paul just before trial, but continued against the bank.
Justice Boyko held that there was no fiduciary duty in the circumstances of the case, and even if there was, the bank had not participated in it. Instead, the judge found that the bank had taken action to effectively thwart any breach by attempting to sell the property to third parties, and that the price obtained was fair market value at the time.
Barry Wintraub of Heenan Blaikie was counsel at trial, with strategic guidance provided by Pault Rouleau (now Mr. Justice Rouleau) and Keith Perrett, Associate General Counsel of the Bank. Robert Hopkins was counsel for Ms. Chitel. Kathryn Chalmers and Adrian Lang of Stikeman Elliott represented Anglo York and Mr. Paul.
Ms. Chitel has commenced an appeal.