The Ontario Superior Court of Justice has thrown out a motion to dismiss a case in which TD Waterhouse Canada Inc. is suing a former broker and one of his clients. The suit will proceed to trial.

The client sought to have the case thrown out, arguing there was no genuine issue for a trial since she had entered a settlement agreement with the firm back in 2003.

In 2001, the client, Pola Goldfluss, an 80-year old widow, transferred her accounts from TD Bank to the TD Waterhouse Canada. Her broker was at TD Waterhouse was Douglas Goodman.

The court notes that there is significant conflicting evidence on why she transferred institutions. Nevertheless, her portfolio was gradually moved out of safer investments into mutual funds.

In 2002, Goldfluss became concerned about her investments, and complained that she didn’t authorize the trades and didn’t understand the investments. Ultimately, TD Waterhouse decided to settle the matter by paying her $250,000. She signed a settlement in release form, but the firm did not.

In March 2003, the firm then sued Goodman for breach of his employment contract and initial claim of damages for $250,000. In February 2004, TD Waterhouse added Goldfluss as a defendant, claiming that if the trades were not unauthorized or unsuitable she made either fraudulent or negligent misrepresentations in reaching the settlement.

In bringing the motion to dismiss, Goldfluss’s counsel argued that she had a good and valid settlement with TD Waterhouse, nothing had changed and Goldfluss was entitled to summary judgment based on the valid settlement agreed to in January 2003. TD Waterhouse argued that, whatever settlement was reached with Goldfluss, was reached based on fraudulent or negligent misrepresentations, and as such it was not enforceable.

The roll of motion court was not assess the credibility of these claims, it merely decided whether there was a genuine issue for trial.

In a ruling released January 24, the motion court judge said, “After careful review, I am satisfied that there is a genuine issue for trial and as a motion judge, I cannot resolve the issue without assessing the credibility of the witnesses and drawing certain inferences.”