St. Lawrence Testing & Inspection Co. Ltd. v. Lanark Leeds Distribution Ltd., 2019 CanLII 69697 (ON SCSM)

The plaintiff and defendant were both innocent victims of a cybercrime, which resulted in the funds paid by the defendant to settle the plaintiff’s claim being sent to a fraudster. The defendants assumed the funds to be unrecoverable and brought a motion seeking an order for judgment confirming that the terms of settlement were satisfied. The plaintiff took the position that the terms were not satisfied as it did not receive settlement funds from the defendant. The plaintiff sought an order for judgment requiring the defendant to pay the settlement amount. The court held in favour of the plaintiff, reasoning that the defendant failed to follow the terms of settlement by sending the funds to the wrong account. The fraudster’s email changing wire transfer instructions did not emanate from the plaintiff or the plaintiff’s law firm, and the evidence did not support a finding that either the plaintiff or the plaintiff’s law firm were negligent with respect to their computer/email security. The court made judgment against the defendants in accordance with the terms of settlement, requiring the defendant to pay the settlement funds to the plaintiff.