Overview:
Travelers Insurance appealed the Superior Court’s dismissal of part of its claim for restitution of funds forfeited to the Crown. The issue was whether Travelers had a constructive trust interest in forfeited property, which should have been paid as restitution to its insureds, Xpertdoc and Thibert, victims of a ransomware attack by Sébastien Vachon-Desjardins.
Key Points:
- Background:
- Cyber-Fraud Incident: Travelers paid over $250,000 to Xpertdoc and $1 million to Thibert under cyber-fraud insurance policies after they were victims of ransomware attacks.
- Criminal Proceedings: Vachon-Desjardins pleaded guilty, leading to the seizure of his assets, including Bitcoin and cash.
- Restitution Claims: Travelers sought restitution for both insureds but only Thibert’s claim was presented, resulting in restitution for Thibert but not Xpertdoc.
- Application for Relief from Forfeiture:
- Travelers’ Claim: Travelers sought relief for the funds paid to Xpertdoc, omitted due to the Crown’s error.
- Application Judge's Decision: The judge partially granted Travelers' application, allowing ransom payments but dismissing claims for additional costs.
- Appeal Decision:
- Constructive Trust: The Court of Appeal found that the Crown’s error amounted to unjust enrichment, giving rise to a constructive trust in favor of Travelers.
- Outcome: The appeal was allowed, granting Travelers additional payment from the forfeited funds beyond the ransom amounts.
- The amount ordered to be paid to Travelers was $255,800. This includes the amount paid out by Travelers to Xpertdoc as at the time of sentencing.
Conclusion: Travelers Insurance was granted relief from forfeiture for the funds owed to Xpertdoc, recognizing a constructive trust due to the Crown's errors.
