Canada: Too Good To Be True? May Be Your Wilful Blindness

Last Updated: April 26 2019
Article by Kathleen O’Hara

This sordid tale begins with an employee going rogue with a company credit card. The Defendant Fung began purchasing iPhones and iPads from the Defendant Minetto in November 2011. The first transaction was seemingly innocent. The two met in the parking lot at Yorkdale Mall. Fung purchased one iPad from Minetto and paid in cash.

Over the course of the next 2.5 years, Minetto sold Fung over 4,900 iPhones and 5,300 iPads in increments of 10 to 20 pieces at a time. Initially, Fung and Minetto met in parking lots to exchange cash for the Apple Products. Eventually, they set up a virtual office where Minetto had Apple Inc. ship the Apple Products directly to Fung.

As it turns out, Minetto was using her employer Wescom's corporate credit card to purchase the Apple Products and then selling the Apple Products for her own personal gain. Minetto's actions went undiscovered for so long because she was the employee responsible for paying the corporate credit card invoices. In the end, Minetto defrauded her employer out of $6.8 million over 5 years. Some of her expenditures were for other unrelated personal items. Over $6.2 million was spent on Apple Products which Minetto later sold. Wescom ultimately discovered the fraud and terminated Minetto immediately.

Wescom obtained a Judgment on consent against Minetto for the full $6.8 million, plus interest. In a separate decision, Wescom was granted leave to sell Minetto's home after a Judge found that Minetto committed multiple material breaches of their settlement agreement.

Superior Court Decision

An action was brought by Wescom based on Fung's alleged unjust enrichment at the expense of Wescom. On consent, the Trial proceeded on the issues of: (1) Whether Fung knew or was wilfully blind to the fact that he was purchasing stolen goods or goods fraudulently obtained by Minetto; and, if yes (2) Did this apply to all transactions or just transactions after a certain date?

Fung admitted that he did not initially ask Minetto where or how she obtained the Apple Products. Later, he asked her if they were stolen and Minetto told him they were "legit". Fung could detect no sign that the Apple Products were stolen. He was not concerned about the cash transactions or lack of documentation for the purchase or resale of the Apple Products.

What Fung knew or ought to have known was analyzed over three distinct stages:

Stage 1: November 2011 to early 2012 – Yorkdale Mall parking lot transactions

During the initial timeframe, Fung purchased 30 iPhones and 400 iPads from Minetto. The Judge held that there was no basis to find that Fung knew, or that the circumstances were sufficiently strong to arouse his suspicions, that the Apple Products had been stolen or obtained through fraud.

Stage 2: Early 2012 to April 2013 – Ikea parking lot transactions

The Judge found it important that Fung again questioned Minetto during Stage 2 whether the Apple Products were legitimate. He had already asked. If he believed her, and there had been no reason to suspect otherwise, why ask again? He found that Fung made a conscious choice not to seek verification or further information about the source of the Apple Products. Fung chose to remain deliberately ignorant. The Judge held that Fung was wilfully blind to the fact that the Apple Products were stolen or fraudulently obtained during Stage 2.

Stage 3: April 2013 to July 2014 – where Minetto shipped products directly to Fung's virtual office

By this time, the business relationship had evolved. Products were being shipped directly from Apple to Fung's virtual office. Fung ordered products from Minetto by email. Minetto would send him a shipping notification provided by Apple. Fung could track the shipment. Shipping was being paid by Wescom. The Judge held that this level of sophistication removed the probability that Fung was wilfully blind to the nature of how Minetto was procuring products. He held that Fung had actual knowledge of the source and nature of the Apple Products he was purchasing from Minetto.

Judgment was granted in the amount of $5 million against Fung. Fung's crossclaim against Minetto for contribution and indemnity was granted in the same amount. Fung appealed.

Court of Appeal

Fung submitted that the Trial Judge erred by applying an objective standard to the wilful blindness analysis (rather than a subjective standard). The Court of Appeal agreed with Fung's submission that the Trial Judge erred in law in his articulation of the concept of wilful blindness when he engaged in an objective analysis. The Trial Judge was not asked to consider whether Fung as a 'reasonable person' would have been alerted to a potential breach of trust.

A finding of wilful blindness, which is the same standard in criminal and civil proceedings,involves a subjective focus on the workings of a defendant's mind.

Notwithstanding the mischaracterization, the Court held that the Trial Judge was correct in his application of the wilful blindness analysis when he found that Fung was wilfully blind. It was clear the Trial Judge made findings of fact establishing that Fung was wilfully blind from a subjective standard. Fung knew that the Apple Products were probably stolen or obtained by fraud, but made a deliberate choice not to investigate.

Fung's appeal was dismissed by the Court.

This case highlights that, in the civil context, wilful blindness in is to be assessed on a balance of probabilities. The test is a subjective one. The Court held that Fung's conduct met the definition of wilful blindness articulated in R. v. Sansregret (SCC), which "arises when a person who has become aware of the need for some inquiry declines to make the inquiry because he does not wish to know the truth. He would prefer to remain ignorant." Once suspicions about certain facts are aroused, a duty to inquire is raised. A party cannot simply bury his head in the sand or look the other way. Failure to make those inquiries can turn what may seem like 'harmless' parking lot transactions into a successful claim for unjust enrichment.

See: Wescom Solutions Inc. v. Minetto, 2019 ONCA 251.

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.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please 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