A B.C. appeal court has dismissed an appeal brought by a former Union Securities Ltd. broker and one of his clients, in an attempt to overturn a lower court ruling dismissing claims for damages from Union Securities for wrongful conversion of money and shares.

The broker, Brian Kuhn, and client, Dana Ratzlaff, brought the claims against Union Securities for selling shares from their accounts and applying the proceeds to deficiencies in their accounts. In November 1997, Ratzlaff opened an account with Union. Her broker was Kuhn. The pair became romantically involved and were married in August 1998.

The first issue at the initial trial related to the nature and scope of the employment agreement between Union and Kuhn, and specifically, whether it permitted Union to deduct client bad debts from commission earnings in Kuhn’s reserve account. The court found in favour of the firm.

The central question concerning Ratzlaff’s conversion claim was whether she had entered into an oral agreement with a firm employee that her shares would not be sold until they became free-trading. The trial judge agreed with Ratzlaff that Union’s application of funds from the sale of her shares to Kuhn’s account was wrongful. However, the judge dismissed the balance of her claim. The judge rejected her contention that the general account agreement was orally amended.

On appeal, Ratzlaff and Kuhn raised the following issues: whether the trial judge erred in failing to find a lack of consideration for Kuhn’s guarantee of bad client debts; and, whether the trial judge erred in finding that Ratzlaff failed to prove conversion in the absence of formal tender by her to Union of the amount required to retire her debt.

The appeal court found no basis with which to interfere with the trial judge’s conclusion.