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Posted by Mr. Joel W. on Feb 28th, 2017 10:05am


                        in INVESTOR LOSS ACTIONS:  A MARRIAGE MADE IN …

                                               by Joel Wiesenfeld


Historically, motions for summary judgment in investor loss litigation in Ontario brought by defendant dealers and financial advisors against plaintiff investors seeking the dismissal of the action as statute barred due to the expiry of the limitation period have been a rarity. 

This has likely been because of three factors:

 (1) the six year limitation period in the Limitations Act, R.S.O.1990, c. L. 15, and the Act’s limited application (including not being applied in respect of allegations of breach of fiduciary duty, a frequent claim in investor loss actions);

(2) the restricted ambit of the summary judgment Rule in the Ontario Rules of Civil Procedure, and its limited judicial application (including not being utilized to determine credibility issues, also a frequent issue in investment loss claims where who said what to whom permeates the allegations); and,

(3) the precedent case of Buell v. CIBC Wood Gundy Securities Inc., a 1998 Decision of the Ontario Court of Justice General Division, affirmed by the Ontario Divisional Court.  In Buell, the dealer’s motion for summary judgment on the basis of the expiry of the limitation period under the then Ontario Limitations Act and the equitable doctrine of laches and acquiescence was dismissed.  The dealer/client relationship terminated in 1997, with the clients at the time being aware of having suffered a loss, and seeking legal advice some eight years later.

 During the period subsequent to Buell, from 1998 to 2011, I could locate only two decisions on summary judgment motions brought in investor loss cases in which a limitation period issue was raised.  In Berry v. IPC Securities Corp., a portion of the action was dismissed, and in Hodaie v. RBC Dominion Securities, the action was entirely dismissed, although on other grounds.

However, times seem to have certainly changed, likely due to the changes in the applicable limitation period statute (now the Limitations Act, S.O. 2002, c.24, and its two year limitation period) and the Summary Judgment Rule 20 of the Rules of Civil Procedure, and their judicial applications to the facts of investor loss actions.  Between 2012 and 2016, there have been eight summary judgment motion decisions dealing with a limitations period defence in investor loss cases, with the result that six actions have been dismissed, and, in the other two, the motions being dismissed (with the issue of the alleged expiry of the limitation period to be decided by the trial Judge).

 As with all issues in investor loss cases, the facts of each particular dealer/client relationship, the client’s investor profile, the conduct of the financial advisor and client during the frequently substantial period of their relationship, the trading in the investment account and its ramifications (whether a realized loss, or a loss of value), and the relevant securities regulatory duties and obligations all act to prevent a cookie cutter analysis of the group of decisions.  Nonetheless, it is clear that Motion Judges are placing increased emphasis on when the loss (that is the subject matter of the claim) occurred and was recognized as a loss by the client, as opposed to when the client understood the factual and legal intricacies of a claim against the financial advisor and dealer.  For example, in Unegbu v. WFG Securities of Canada Inc., et al, 2015 ONSC 6408 (Motion); 2016 ONSC 761 (Costs); 2016 ONCA 501, the Court of Appeal dismissed the plaintiff client’s appeal of the motion Judge’s decision, which had granted the motion for summary judgment, rejecting her submission that it was only when she received letters in mid 2011 from the MFDA responding to her complaint against the defendant dealer and financial advisor that she became aware of her right to sue them.  The Court stated that:  “It is well-established that a lack of appreciation of the legal significance of the facts grounding a claim does not stop the limitation [period] from running.”

Whether summary judgment motions based on the expiry of the limitation period in investor loss cases is a trend that will continue remains to be seen; but the issue of the time period between when a loss (howsoever defined in the circumstances) was sustained and the commencement of the action is now an important factor to be considered when analyzing the merits of a case.


                                                            LIST of CASES


Buell v. CIBC Wood Gundy Securities Inc., [1998] O.J. No. 2861 (Ont. Gen. Div.), aff’d [1998] O. J. No. 4313 (Ont. Div. Ct.),

Berry v. IPC Securities Corp., [2009] O.J. No. 1598 (Ont.S.C.J.),

Hodaie v. RBC Dominion Securities (2011), 108 O.R. (3d) 140 (Ont. S.C.J.), aff’d 2012 ONCA 796 (C.A.)

Beaton v. ScotiaiTrade and Scotia Capital, 2012 ONSV 7063 (Ontario Superior Court of Justice); aff’d 2013 ONCA 564 (Court of Appeal for Ontario)

Johnson v. Studley, 2014 ONSC 1732 (Ontario Superior Court of Justice)

Galineas v. RBC Dominion Securities Inc.,  2014 ONSC 20 (Superior Court of Justice – Ontario; 2014 ONSC 1129

Unegbu v. WFG Securities of Canada Inc.  – 2015 and 2016

Masales v. Cole, 2016 ONSC 763 (summary judgment motion), 2016 ONSC 1814 (costs)

Aalto v. RBC Dominion, 2016 ONSC 7552 (Ontario Superior Court of Justice)

Webb v. TD, 2016 ONSC 7153 (Ontario Superior Court of Justice)

1654776 Ontario Limited v. Dundee Wealth Inc., June 29, 2016, Court File No. CV-10-00405817-0000  (Ontario Superior Court of Justice)


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