Court rules in favour of labour-sponsored venture fund against fund manager

The Court of Appeal for Ontario upheld a lower court ruling that a lawsuit brought by an investor, Hope Unegbu, against WFG Securities of Canada Inc. should be dismissed on the basis that it was filed after the two-year limitation period expired.

According to the appeal court’s decision, Unegbu brought her case in January 2012 claiming negligence, misrepresentation, breach of fiduciary duty and deceit in connection with an investment and related loan that was arranged in June 2008.

None of those allegations were proven. Instead, the motion judge dismissed the lawsuit on the ground that it was brought outside the limitation period and that Unegbu was “fully aware of the material facts forming the foundation of her claim in November 2008, or at the latest, in May 2009.”

Now, the appeal court has upheld that ruling, rejecting Unegbu’s argument that she was not aware she had the right to sue until she received letters in 2011 from the Mutual Fund Dealers Association of Canada (MFDA) responding to her complaint against the firm.

“Those letters indicated that if the appellant wished to seek compensation for any loss she had suffered, she could either contact the Ombudsman for Banking Services and Investment or file a lawsuit,” the court says.

However, both the appeal court and the motion judge rejected this argument, noting that “those letters did not supply the appellant with any factual or other information that she needed to know in order to assert a claim. The appellant knew she had suffered a loss no later than May 2009 and from that date, she firmly held the view that the appellants had wrongfully cheated her of her money. She had two years from that date to commence an action.”

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