In reasons for decision released on March 1, 2022, the Ontario Divisional Court maintained the dismissal of the Plaintiffs’ certification motion in a  $40 million  proposed class action in Boal v. International Capital Management Inc. David O’Connor and Sean Grayson of Roy O’Connor LLP acted for the Defendants both on the motion below and on the appeal  that saw the certification motion dismissed against our Defendant Clients.

 The Divisional Court’s decision, as well as the decision below provide important commentary and direction on the scope of financial advisors’ duties to their clients as well as on threshold certification issues.

According to the Divisional Court:

“The goal of the imposition of fiduciary duties is to protect a relationship the law recognizes as one of high trust and confidence, based on the implicit dependency and vulnerability to another. With the recognition of the relationship comes the imposition of proscriptive duties, notably the no-profit rule and the no-conflict rules, as well as the prescriptive duties of good faith and confidence. But duties of good faith, care, confidentiality, and disclosure apply to a variety of non-fiduciaries as well. As the motion judge set out, the fiduciary standard is exceptional. Other legal concepts which may apply – protection in contract, tort, and unjust enrichment – are available to regulate the conduct alleged here, albeit not on a class, but an individual basis. While the MFDA rules and the FP Code are a part of the analysis, they are not the whole of the analysis.

For these reasons, the appeal is dismissed.”