TD Evergreen has lost its appeal of a B.C. court decision that found liable for negligence in transferring an RRSP, but a related appeal by TD Bank was upheld.

TD Bank and TD Evergreen were found liable for damages suffered by a client when Colleen Desharnais transferred an RSP naming her as beneficiary from the bank to the brokerage, and thereby lost her designation as the beneficiary of the RSP. The transfer was made under a power of attorney held by Desharnais over her common law husband’s affairs. The husband, who was incompetent at the time of the transfer, soon died.

The trial judge found that Evergreen was liable for negligence and breach of fiduciary duty for failing to properly advise Desharnais of the importance of designating a beneficiary on the transfer form. The trial judge also found the TD Bank liable for negligence for participating in an “illegal” transaction whereby the effect of the transfer was to change the beneficiary from Desharnais to her common law husband’s estate.

Evergreen’s appeal was dismissed by the B.C. Court of Appeal on the basis that the evidence supported the trial judge’s finding of liability. The appeal court also dismissed the brokerage’s appeal to find the client contributorily negligent. The court said that the client’s loss was entirely the result of bad advice.

The court allowed TD Bank’s appeal on the basis that the evidence did not support the conclusion that there was a duty of care on the bank to determine whether the transfer was in accordance with the common law and provincial statute law, and to refuse to complete the transfer in the event it was not. The court set aside the award of damages against TD Bank.