The Ontario court of appeal has dismissed a bid by an investor to sue his financial advisor for losses due to his advice.

The investor, Garnet Chesebrough, was appealing a decision by a lower court, which dismissed his action against his broker, Stephen Willson and his firm, Merrill Lynch Canada Inc., for damages for breach of trust, breach of fiduciary relationship, breach of contract and negligence.

Chesebrough’s legal counsel argued that the trial judge erred in failing to characterize the nature of the relationship between the parties as fiduciary in nature.


The appeals court ruled that the trial judge didn’t make a mistake. “It is apparent from the trial judge’s thorough and detailed reasons for judgment that he adverted to the correct test and inquired into all of the relevant factors on this question. We are also satisfied on our review of the record that his findings of fact are supported by the evidence. Consequently, there is no basis to intervene with respect to the conclusion that the relationship was not fiduciary in nature.”

Chesebrough also argued that the advisor’s conduct was wrongful in several respects. Most of his complaints related to the sale of his Bre-X shares. Chesebrough’s counsel argued that, were it not for the advisor’s wrongful conduct, Chesebrough would have retained his Bre-X shares for a longer period, sold them at the height of the market before the fraud was discovered, and made an additional extraordinary profit.

The court didn’t buy this argument either. It said, “Although counsel for the appellant couched many of the issues related to the advisor’s conduct in terms of legal principles, it is our view that their determination was entirely fact driven. It is not the role of this court to substitute its view for that of the trial judge in the absence of any palpable and overriding error committed in the trial process. The appellant has not satisfied us that there was any such error. We see no basis to interfere with the trial judge’s conclusion that the appellant had not made out any case to support a finding of liability.”

The appeal was dismissed with costs fixed at $15,000 plus disbursements and GST.