A former Thomson Kernaghan & Co. client has lost his bid to add the Investment Dealers Association and several of its executives as defendants to a lawsuit against TK.

Arguments on the case were heard in Ontario Superior Court Thursday morning, and a decision was released late this afternoon. Madame Justice Mesbur ruled in favour of the IDA defendants. The aggrieved investor, Chris Morgis, aimed to add the IDA, its president and CEO, Joe Oliver, chairman, Terry Salman, and Kym Anthony as defendants in the suit.

In her decision, Mesbur states, ” … the proposed amendments to the clam in relation to the proposed added IDA defendants discloses no reasonable cause of action. It is ‘plain & obvious’ the action against them cannot succeed. Accepting, as I must, all the facts pleaded a true, they are insufficient at law to support a cause of action. Since that is the case, the relief sought against the IDA defendants is dismissed …”

At the morning hearing, the court did amend the claim to add several TK executives to the suit. They did not respond to the motion, and no one appeared on their behalf to oppose the motion.

Gary Luftspring of Goodman and Carr appeared on behalf of the IDA this morning, and argued that the self-regulatory organization does not owe a duty of care to investors, among other things. Luftspring pointed to several Supreme Court of Canada precedents, where the court has refused to hold regulators responsible in similar circumstances. He also cited a couple of cases from the Ontario Court of Appeal, including a recent decision which refused to hold a smoke detector certification firm responsible for losses caused by a faulty smoke detector that it had certified.

McCarthy’s Erica Baron, representing Morgis, tried to make the case that the circumstances of this case differ sufficiently to allow the case to proceed to trial and consider whether the IDA could be held liable for an investor’s losses.