Products

Plaintiffs not required to provide more evidence, judge says

By IE Staff |

(March 16 - 16:30 ET) - A British Columbia court has denied an application by Investors Group Inc, which sought to push the plaintiffs in a lawsuit against the firm to provide more evidence for their claim.

The case pits Heinz and Wilhelm Kowalewski against IG and former IG rep Lyle Regier. IG was seeking an order requiring the plaintiffs to produce added evidence to support their claims of breach of fiduciary duty on IG's part.

The suit stems from a case involving Regier, who was assigned to the plaintiffs' account after their first IG rep left the firm in 1995. In July 1996, Regier was dismissed by IG for allegedly borrowing money from clients and for not treating his gambling addiction, which had led to substantial debts. In July 1997, the B.C. Securities Commission terminated Regier's licence to sell mutual funds.

In the summer of 1997, Regier persuaded the plaintiffs to withdraw their investment funds from IG and transfer them to his control. The plaintiffs allege that Regier invested their funds in inappropriate investments and lost all of their money. Their claim against IG appears to be for damages for negligent non-disclosure, amounting to a breach of its fiduciary duties to them, for not warning them about Regier.

"Because this is largely a case of 'failure to disclose' on behalf of Investors, I am satisfied that the plaintiffs do not have complete knowledge of the evidence to support each and every one of their allegations contained in the Statement of Claim at this time. The circumstances surrounding the dismissal of Regier and the reasons therefore are solely within the knowledge of Investors," said the Hon. Mr. Justice Metzger in denying the application.

He noted that the suit was filed last summer, followed by a demand from IG for particulars. This was received last October, followed by a statement of defence from IG. "I note there was no indication by Investors that the initial reply to the defendants' demand for particulars was deficient or inadequate."