A Saskatchewan court has declined to throw out a suit brought against a pair of regulators by a fund salesman.

According to the judgment filed Dec. 21, 2010, Brian Mallard, a fund salesman and financial planner is suing both the Mutual Fund Dealers Association and the Saskatchewan Financial Services Commission claiming abuse of public office, and unlawful interference with economic interests.

“The plaintiff in his claim essentially alleges that the defendants, by illegal conduct, intentionally interfered with the plaintiff’s business relationships with his clients, and as a result, lost clients and money,” the judgment states.

The judgment notes that Mallard is claiming, in part, that his licence renewal was withheld improperly by the SFSC as a result of an investigation into his business by the MFDA. “As a result, the plaintiff could not sell mutual funds to clients during the period of the delay. He could not earn income during that period and he also suffered a loss of clients by his inability to service them,” the judgment states.

The allegations have not been proven, and the MFDA and SFSC were seeking to have the case tossed out on the basis that it “discloses no reasonable cause of action.” The judgment also indicates that a statement of defence has yet to be filed, and its ruling on the motion to dismiss the claim is based on the contents of the statement of claim.

In terms of the claim for abuse of public office, the judgment only deals with the question of whether the MFDA should be considered either public officials, or exercising a statutory authority or power.

“The MFDA has argued that they are not public officials acting pursuant to any statutory authority and did not exercise any statutory power in regard to the plaintiff. If the claim had been solely related to the MFDA’s actions independent of any relationship with the SFSC, I would agree with their position,” the judgment states. “Clearly, however, the claim is being made against them based on their activities as agent for the SFSC.”

The judgment concludes, “it is not a plain and obvious case that the matter is beyond doubt,” and as a result, the court denied the MFDA’s application for striking this part of the claim.

In terms of whether the statement of claim discloses a cause of action against the regulators for unlawful interference with economic interests, the court also dismissed the regulators’ motions.

The court awarded costs to Mallard of $1,500 against the MFDA and $500 against the SFSC.

IE