Case Summary

4590 Negligence misrepresentation liability can be imposed for the implied assertion that results from concealing a fact that makes what has been stated a half-truth; the Bily rule, limiting the duty owed by auditors does not apply if in preparing a client's financial statement, the defendant reasonably had access to financial information about the client other than what the client supplied; a vendor has a duty to disclose material facts of which it knows to immediate purchasers and downstream, or subsequent, purchaser it reasonably expects will purchase in reliance on its statements; a plaintiff may justifiably rely on representations made by a defendant without independent investigation if it has no reason to suspect the truth of the representations; although reliance and proximate causation are distinguishable, if facts establishing their existence are intertwined, plaintiff's justified reliance may be relevant to causation; in fraud cases, the out-of-pocket rule, ordinarily applied in California, permits plaintiff to recover the difference between what it paid and what it received, so if what it received was worthless, plaintiff may recover the amount it paid.

OCM v CIBC (Investment Fraud) 157 CA4 835 [See: Small v Fritz 30 C4 167, T/AT 5/03; Bily v Arthur Young 3 C4 370, T/AT 11/92]