The Ontario Superior Court of Justice has upheld a small claims court ruling that dismissed an investor’s claim against discount broker TD Direct Investing, seeking compensation for a drop in the price of shares purchased through the platform.
According to the court’s decision, investor Hao Yu sued the firm in small claims court, seeking damages for the difference in the value of shares in a biotech company at the time a trade was executed in 2019 and when the money was debited from her account — arguing she did not “acquire” the shares until the money was deducted and suffered losses in the meantime.
In a 2020 decision, the small claims judge dismissed the claim, ruling the investor failed to establish any liability against the broker.
The court said the judge found that once the investor’s order was filled, the stock became her property.
“Once the [investor] learned from looking at her screen that her order had been filled, the shares she acquired were available for trading. Therefore, her alleged inability to access them could not be the [broker’s] responsibility,” the court said. If she did not know how to access shares from filled orders on the broker’s platform, it was her responsibility to understand how the platform worked.
The court also said the brokerage firm “had no responsibility to provide the [investor] with advice about any particular transaction and had no responsibility to conduct the trade; the [investor] was aware of this and freely assumed the risk.”
It added that the broker was not liable to the investor “for any inaccurate information on the WebBroker” based on the terms of the client services agreement.
On appeal, the investor argued that the small claims judge ignored her evidence and made errors of law.
However, the court rejected her appeal, concluding there was “no palpable or overriding error” in the judge’s decision, which is entitled to a high degree of deference.
“The evidence was straightforward. The [investor] had access to the shares and was free to trade them from the moment she acquired them. According to [client services agreement], the [broker] was not liable for any inaccurate information,” the court said, adding that the discount broker “had no responsibility to give advice or conduct a trade.”
“The value of the shares purchased dropped after the [investor] ordered them. She had the capacity to trade them at any time but waited to do so. The failure of the [investor] to learn the operation of the… trading platform and specifically how to trade stock cannot be laid at the feet of the [broker],” the court said.
The court also rejected the investor’s claim that the small claims judge was biased or discriminated against her because she was self-represented and English was not her first language.
“Other than some general allegations of bias on the part of the trial judge, there is simply no reliable or persuasive evidence of bias sufficient to rebut the strong presumption of judicial impartiality,” the court said in rejecting that ground for appeal.
“Not only is there no transcript on which to base any finding of bias or discrimination, there is nothing in the reasons of the trial judge which remotely hints at bias or discrimination,” it added.