Canada: Approximately 2.5 Million Dollars Gone In Approximately 2.5 Seconds


Dentons LLP has recently become embroiled in a coverage dispute with its insurer over an approximate 1.7 million dollar loss after falling victim to an email scam. Recent Ontario Superior Court decision, Dentons Canada LLP v. Trisura Guarantee Insurance Company1 tells the tale of how an email scam induced the large multinational law firm into misdirecting approximately $2.5 million dollars of a client's funds which were held in trust.

The Facts

The series of events which perpetrated the firm's loss began innocently enough:

An associate of Denton's Vancouver office was representing a client in a real property matter. The mortgage for this property was held by Timbercreek Mortgage Servicing Inc. (“Timbercreek”). In order to discharge a portion of the mortgage against the property, the firm was to transfer Timbercreek $2,518,250 of the client's funds which were being held in the firm's trust account.

On December 28, 2016, a representative from Timbercreek provided wire transfer instructions and banking information to Dentons via email. Other representatives from Timbercreek were copied on this email. On January 3, 2017, Dentons received another email from the same Timbercreek representatives. The email requested that the funds be directed to an international third party account located in Hong Kong, under the name of Yiguangnian Trade Co. Ltd. (“Yiguangnian”). Dentons attempted to contact the representative from Timbercreek and left a voicemail asking for confirmation of the instructions it received. The firm did not receive a response from the representative. Dentons proceeded to receive more emails from the Timbercreek representative explaining that this requested was being made because the bank account mentioned in the initial email was being audited. After receiving signed authorizations from both Timbercreek and Yiguangnian, Dentons proceeded to transfer $2,518,250 to the third party account.

Soon after on January 6th, Dentons was contacted by a representative of Yiguangnian. This individual informed the firm that it did not know Timbercreek, nor who signed the authorization on its behalf for the wire transfer. The individual advised that they were not expecting the wire transfer, and asked Dentons to recall it. Ten days later, Dentons received an email from the actual representative of Timbercreek inquiring on the status of the payment. Soon after, the firm realized it had been duped into transferring its client's funds to a fraudulent account.

The Dispute

Dentons subsequently submitted a claim to its insurer, Trisura Guarantee Insurance Company (“Trisura”), in the amount of $2,518,250. The firm recovered $784,739.59. Trisura denied coverage for the firm's net loss of $1,733, 510.50. Dentons sought coverage for its claim under the policy's Computer Fraud Rider provision which states:

Loss resulting from the wrongful abstraction of Money, Securities or other property which follows and is related to the use of any computer to fraudulently cause the transfer of such property from inside the Premises or a Banking Premises or similar recognized places of safe deposit to a person (other than a Messenger) or to a place outside those Premises.2

However, Trisura maintained that this provision was not applicable to Dentons' loss. Trisura's position was that a computer was not used to fraudulently transfer the payment, as the transfer itself was not fraudulent. Trisura argued that this loss fell under the Social Engineering Fraud Rider provision which Dentons had declined to obtain. Furthermore, Trisura insisted that its policy had an exclusionary clause. The policy also contained a condition XIII(B) which stated:

If there is any other valid and collectible insurance which would apply in the absence of such insuring agreement, the insurance under this bond shall apply only as excess insurance over such other insurance, provided the insurance shall not apply:

  1. to property which is separately described and enumerated and specifically insured in whole or in part by any other insurance, or
  2. to property otherwise insured unless such property is owned by the insured.3

Trisura argued that section B of the above clause excluded coverage to Dentons because Dentons was not the owner of the funds which were misdirected. Further, Trisura also argued that Dentons had policies under various other insurers which could potentially cover the claim. This could render Trisura an excess insurer as per the above provision.

Dentons brought forward an application seeking an “advisory opinion”4 from the court on the interpretation of the Computer Fraud Rider provision, without the consideration of the Condition XIII. In response, Trisura started a Declaratory Action to allow the court to determine the dispute in consideration of all the relevant parties involved, including the various other insurers that could potentially provide Dentons coverage for the claim.

The Outcome

On December 11, 2018, Justice Carole Brown ultimately decided that the best use of the court's resources would be for the application to be converted into an action. Justice Brown explained, “[t]he full factual matrix is not before this Court, and is needed to make a comprehensive determination of the issues of coverage.”5

This case serves to remind us all to exercise caution in the face of modern-day security threats. The eventual outcome of this matter will be a relevant insight into the law for both insurers and insureds, as no one is immune to the risks of our modern day scams.

It also reminds us that with the rising incidents of cybercrimes, it is essential that we review and update our insurance coverages. Just having a Cyber rider may not be enough.


1. 2018 ONSC 7311

2. Ibid at para 14

3. Ibid at para 15.

4. Ibid at para 26.

5. Ibid at para 48.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Sign Up
Gain free access to lawyers expertise from more than 250 countries.
Email Address
Company Name
Confirm Password
Mondaq Newsalert
Select Topics
Select Regions
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions