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Civil Litigation Cases - Interpleader. Tacora Resources Inc. v. 1128349 B.C. Ltd.
In Tacora Resources Inc. v. 1128349 B.C. Ltd. (Ont CA, 2026) the Ontario Court of Appeal allowed an appeal, this brought against "the dismissal of an interpleader application under r. 43 of the Rules of Civil Procedure".
Here the court usefully considers rarely-litigated 'interpleader' law:Governing legal principles
[31] Rule 43 falls within the section of the Rules of Civil Procedure governing the preservation of rights in pending litigation. The purpose of an interpleader proceeding “is to prevent a multiplicity of suits and double vexation, to assist applicants who want to discharge their legal obligations but do not know to whom they should pay the amounts to”: Devry Smith Frank LLP v. Fingold, 2021 ONSC 2762, at para. 27.
[32] Rule 43.02(1) provides that:A person may seek an interpleader order (Form 43A) in respect of property if,
(a) two or more other persons have made adverse claims in respect of the property; and
(b) the first-named person,
(i) claims no beneficial interest in the property, other than a lien for costs, fees or expenses, and
(ii) is willing to deposit the property with the court or dispose of it as the court directs. [33] “Property” in r. 43.02 “means personal property and includes a debt”: r. 43.01(1). A claimant includes “each person who makes a claim in respect of the property”: r. 43.01(2). The procedural steps for obtaining an interpleader order contemplate a situation where “no proceeding has been commenced in respect of the property”: r. 43.03(1)1.
[34] In Canadian Imperial Bank of Commerce v. Costodian Inc. et al, 2018 ONSC 6680, at para. 26, Hainey J. summarized the following principles that apply to an interpleader application:(a) The applicant is not required to prove competing claims have actually been filed against it;
(b) The applicant is only required to demonstrate that there is a real foundation for the expectation of competing claims; and
(c) The applicant is not required to establish that competing claims are valid or likely to succeed only that they are not frivolous. [35] Rule 43 is accordingly not confined to situations in which formally articulated competing demands have been made. Even in the absence of such explicit demands, interpleader relief may be granted if surrounding circumstances give rise to a real risk and foundation of competing claims and corresponding liability: see for example, The Toronto-Dominion Bank v. The Estate of Cheryl Anne Walker, 2021 ONSC 4092, at paras. 14-18.
[36] Rule 43.04 sets out the orders that a court may make on an interpleader motion or application. Under r. 43.04(1), the court may,(a) order that the applicant or moving party deposit the property with an officer of the court, sell it as the court directs or, in the case of money, pay it into court to await the outcome of a specified proceeding;
(b) declare that, on compliance with an order under clause (a), the liability of the applicant or moving party in respect of the property or its proceeds is extinguished; and
(c) order that the costs of the applicant or moving party be paid out of the property or its proceeds. [37] Under r. 43.04(2), the court may make other orders in the context of an interpleader order. It may, for example, order that a claimant be made a party to a proceeding already commenced; order the trial of a defined issue between the claimants; decide questions of law where the facts are not in dispute; or determine the claimants’ rights in a summary manner.
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[49] The Ontario courts have jurisdiction to hear and adjudicate Tacora’s application. Tacora is an Ontario company, with a head office in Ontario, and the property at issue, the royalty payment, is situated in Ontario. Further, no respondent to the application argued that there was a more appropriate forum for the interpleader application: see Van Breda, at paras. 102-3. Instead,112 and the appellants responded to the application on the merits. In doing so, they attorned to the jurisdiction of the Superior Court of Justice: Van Damme v. Gelber, 2013 ONCA 388, 115 O.R. (3d) 470, at para. 22, leave to appeal refused, [2013] S.C.C.A. No. 342. The connections between the parties and other jurisdictions, and the pending proceedings in the Cayman Islands, do not inherently deprive an Ontario court of jurisdiction.
[50] Nothing in r. 43 suggests that it is unavailable because the underlying dispute will be resolved elsewhere. On the contrary, r. 43.03(1)1 expressly contemplates interpleader relief in circumstances where “no proceeding has been commenced in respect of the property” that is the subject of the application, without qualification as to where a proceeding may be commenced. Form 43A’s invitation to parties to refer to “a proceeding in this court” cannot be read to contradict the clear language of r. 43.03(1)1.
[51] A standard interpleader order under r. 43.04(1) does not resolve the underlying dispute between the claimants. It does not even require that a proceeding be underway when it is made. Its purpose is simply to allow an “‘uninterested person who has possession or control of property which is the subject matter of a dispute between two or more persons […] to extricate himself from the dispute so that he does not have to incur potential liability”: Savage, at para. 11.
[52] A court may, pursuant to r. 43.04(2), make orders accessory to an interpleader order that may have the effect of resolving some of the underlying dispute over the property at issue. Nothing in r. 43, however, requires a court to make any such orders, nor were such orders sought by Tacora.
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