By James Langton

(February 20 – 16:45 ET) – Equity Retirement Savings Systems Corp. is suing CIBC and former chief executive officer candidate Holger Kluge claiming the bank improperly used confidential information.

The suit filed by ERSS in British Columbia alleges in its statement of claim that from 1992 to 1998 it provided confidential information to CIBC so that it could evaluate and — if it chose to proceed — sponsor and support ERSS as its financial partner, trustee and issuer of RRSP rewards. According to ERSS, CIBC wrongfully appropriated the information and used it for its own benefit in a VISA card program.

ERSS is claiming damages against both CIBC and Kluge, then a senior officer of the bank, for breach of fiduciary duty, misuse of confidential information and for disgorgement of the profit earned by CIBC on its VISA card program. Kluge left CIBC after losing a high profile power struggle with current CEO John Hunkin for the top job at CIBC. The trial is set to start May 28.

A B.C. Supreme Court judge, the Honourable Mr. Justice M.D. Macaulay, rejected a motion by CIBC and Kluge to sever the trials on the issue of liability and damages. CIBC and Kluge said the issue of liability should be tried separately from damages for three reasons: the issue of damages cannot yet properly be determined; the plaintiffs’ case on liability is weak; and CIBC has a legitimate commercial interest in protecting its confidential financial information before liability has been determined.

The judge rejected CIBC’s argument, noting, its grounds for severance are not, “extraordinary or exceptional”.

The judge also ordered CIBC to produce full disclosure of the profit it hoped to make from the program. “CIBC conceded that any confidential financial documents would be relevant although counsel for the bank did not concede that they existed. I consider it highly unlikely that the bank would have no documents or records concerning the profitability of one of its programs,” wrote the judge.

With the trial slated to start in four months four months, the judge said, “I consider it necessary to order CIBC to deliver an affidavit of documents to ensure that its representatives have put their minds to producing all relevant documents in a timely fashion. Once they have done so, the affidavit will provide some measure of comfort to ERSS that the process is complete.” The court ordered this disclosure by February 28.