An Alberta court has tossed out a lawsuit against a brokerage firm, in which it was alleged that the firm provided poor financial advice, citing the expiry of the limitation period in the case.
The Court of Queen’s Bench of Alberta granted a motion for summary judgment from CIBC World Markets Inc., dismissing the lawsuit against the firm and an advisor that alleged they provided improper investment advice resulting in investor losses.
The application for dismissal was based solely on the argument that the limitation period of two years to file a civil lawsuit had expired in the case before the lawsuit was filed. The firm argued that the limitation period started to run in August 2007, when the plaintiffs transferred most of their accounts to another firm from CIBC World markets. The plaintiffs in the case maintained that the limitation period began in November 2010, when their remaining corporate account was transferred to another firm. The lawsuit was filed in 2011.
The court noted that the plaintiffs argued that “an action could not be seen to have been warranted until their losses were crystallized with the liquidation and transfer of the Norex accounts in 2010. They also argue that the individual accounts were part of a broader overall picture involving the Norex account and that the individual limitation periods were therefore extended.”
However, the court disagreed. It noted that the Norex account “simply sat dormant with no trading activity whatsoever” from November 2007 to 2010. “All of the other accounts had either been closed or transferred. There was no evidence of any ongoing investment advice being given by CIBC [World Markets],” the court stated.
Indeed, it concluded that, “There is no evidence of an ongoing investment advisor relationship … after August, 2007. Consequently, there is nothing to extend the limitation period and the limitation period expired two years from August 2007. The plaintiffs clearly knew of their dissatisfaction with the investment advice that they had received at that time, and they knew that they had suffered significant losses. While arguably they could not quantify them as the very nature of equities is that prices fluctuate, the losses were large, and there was no reason to refrain from bringing an action if they felt that the defendants were responsible for their losses. Holding shares in one corporation, in one account, with no ongoing advice relationship, does not extend the limitation period indefinitely.”
The court dismissed the action on that basis, without delving into whether the claims were legally valid or not.