Summary Judgment for $20 Million Overturned

This article discusses the Ontario Court of Appeal's decision to reverse a $20 million summary judgment based on a criminal conviction for fraud. The case involves Dirk Plate, who was sued by Atlas Copco Canada Inc. for breaching his fiduciary duty. The court found that relying on evidence from criminal proceedings in subsequent civil matters has clear limits. The article provides insights from legal experts and highlights the importance of distinguishing between essential and incidental evidence.

Business Law Assignment

Summary Judgment for $20 Million Overturned
“$20-million judgment overturned” Law Times March 25, 2019
https://www.lawtimesnews.com/article/20-million-judgment-overturned-17037/
This article is related to the decision of the Ontario Court of Appeal to reverse the summary
judgment for $20 million based on criminal conviction for fraud regarding $5000.
The appellant in this case, Dirk Plate, appealed from the order of the motion judge to grant
summary judgment of $20 million to the respondent Atlas Copco Canada Inc., regarding its civil
claim against the appellant for the breach of his fiduciary duty (CanLII, 2019). Plate was
employed as the General Manager of the Construction and Mining Technique (CMT) division
and promoted as Vice President for Global Strategic Customers. His employment was terminated
by the respondent in 2007 and was sued in 2008 on the claim of involvement in a scheme that
defrauded the company. Plate was afterwards charged criminally for being convicted of
defrauding the company of more than $5000 in contradiction to section 380 (1) of the Criminal
Code, R.S.C. 1985, c. C-46. During imposition of sentence, judge found that participation of
appellant in the fraudulent scheme accounted for ‘gross breach of his fiduciary duty’ towards the
respondent (CanLII, 2019). The respondent then moved for summary judgment in its civil action,
where the motion judge determined that Plate was fiduciary of the respondent and had breached
his fiduciary duty and granted the judgment for $20 million for the company.
The Court of Appeal of Ontario has now reversed the summary judgment for $20 million based
on criminal conviction for fraud of around $5000 through the fraudulent scheme. The lawyer for
the appellant stated that the case required scrutiny, as the court of appeal has reasoned serving
notice that there are clear limits regarding admissibility of when parties should rely on the
material from criminal proceedings as proved in subsequent civil matters (CanLII, 2019). It was

stated by a corporate litigator that it has been affirmed by a recent ruling that there is a major
distinction between the use of evidence essential to the verdict and relying on evidence that was
more incidental and not essential to the criminal case. He also stated that in a number of cases,
plaintiff prefers to rely on outcomes from criminal trial to reduce the civil proceedings (CanLII,
2019).
When Plate was criminally charged for defrauding the company of around $5000 by
intentionally expanding the invoices for employee benefits to around $20 million. After
sentencing, it was also found by the judge that the participation of Plate in the fraud against
company amounted to gross breach of his fiduciary duty (Melnitzer, 2019). It was also revealed
by the judge during further proceedings that appellant was one of the highly trusted members of
the company and had unacceptably betrayed that trust through his passive consent in the
fraudulent scheme. Considering all these facts, judge concluded the sentence to Plate for 5 years
of imprisonment (Melnitzer, 2019).
Atlas Company found the decision to be not satisfactory and moved for summary judgment in
the civil proceedings in the Superior Court of Ontario. Justice Sean Dunphy gave considerable
weightage to the findings of the sentencing judge and concluded that Plate was a fiduciary for the
purposes of civil action and granted summary judgment for $20 million for the company
(Melnitzer, 2019). The decision related to the sentencing considered the findings that appellant
was a fiduciary and was supported by the title of the appellant during the related time period, as
he was positioned as General Manager and then the Vice President of CMT. Being the
responsible authority of the company, the decision related to the sentencing involved the duties
that were being performed by him. Furthermore, the vulnerability of the Atlas Company towards

him provided the judge not a single evidence to refute the findings of sentencing judge
(Melnitzer, 2019).
The core submission of the appellant to appeal against the decision was expressed clearly that the
motion judge could not grant summary judgment. The unanimous bench of judges which
includes JJ Kathryn Feldman and Grant Huscroft overruled the decision of judge Dunphy and
sent the case for trial purpose again. However, it was agreed upon by the unanimous bench that
Dunphy had also agreed to the sentencing findings by the sentencing judge. Associate Chief
Justice Alexandra Hoy stated that under section 718.2(a) (iii) of the Criminal Code, the extent of
breach of trust by the appellant is a relevant consideration. So, the issues in the criminal
proceedings were not similar to the findings of the civil proceedings and were not taken into
consideration to admissibility of sentencing findings of judge as compared to the breach of
fiduciary duty by the respondent (Melnitzer, 2019).
Judge Dunphy emphasized a lot on fiduciary duty but did not consider factors related to the
fiduciary duties in accordance with the findings of the sentencing judge. The factors included the
similarity of the issues to be taken into consideration, identity of parties, nature of previous
proceedings, opportunity provided to Plate to challenge previous findings and, if previous
proceedings were of civil or criminal nature. Hoy mentioned that characterizing an individual as
a fiduciary is a question of fact and law so, sentencing judge had no right of legal submissions
from the parties on the issue and had not announced to the decision of any legal authority
regarding the test for imposing fiduciary obligation and considering the appellant to be as
fiduciary. As it was not express or implied in the verdict of the jury that Plate was a fiduciary but
was done in exercising the sentencing powers by the trial judge, Dunphy made a mistake by not
considering these factors and thus erred majorly (Melnitzer, 2019).

Hoy concluded that he was not satisfied with the fact that the record before the motion judge
positioned him to provide essential factual and legal findings whether to consider breach of
fiduciary duty amounting to $20 million or to dismiss the claim. Then, the ultimate result would
be based on the decision whether Plate will be considered by the court as the fiduciary. The
matter is still before the court for final decision (Melnitzer, 2019).
References
CanLII. (2019). Plate v. Atlas Copco Canada Inc., 2019 ONCA 196 (CanLII). Retrieved from
Canlii.org: https://www.canlii.org/en/on/onca/doc/2019/2019onca196/2019onca196.html
Melnitzer, J. (2019). $20-million judgment overturned. Retrieved from Lawtimesnews.com:
https://www.lawtimesnews.com/article/20-million-judgment-overturned-17037/