An Ontario court has declined to strike out allegations of “abuse of process” in a lawsuit between two brokerage firms over advisor defections.

According to a decision from the Ontario Superior Court of Justice release earlier this week, BMO Nesbitt Burns Inc. is suing TD Waterhouse Canada, a couple advisors, and their assistant, that defected from the BMO branch in Collingwood, Ont. to TD in November 2011, seeking $500,000 in damages, along with injunctive relief, alleging breach of contract, breach of their duty of good faith, and breach of confidence.

The case has not been heard, and its merits have not been ruled upon.

The decision released by the court relates to a motion brought by BMO seeking to strike out several paragraphs of the statement of defence, claiming that they don’t comply with the rules of pleading, and that they are “otherwise scandalous, frivolous or vexatious”.

The decision indicates that the advisors — Donna Short, Robert Bramwell and Lu-Anne Breedon — claim that they did not voluntarily leave BMO, and that they were forced to resign by a branch manager, Peter Hodgson, after he learned that they had been approached about moving to TD.

BMO sought an order striking out paragraphs in the advisors’ defence that describe the workplace environment at the branch, and the conduct of the branch manager.

In those paragraphs, the advisors claim that a “toxic employment environment” existed at the branch, and they blame the branch manager. The court declined to strike out those paragraphs from the defence, ruling that the relationship between the branch manager and the advisors, and the work environment, are relevant to determining whether they quit, or were effectively fired.

“The trial judge will have to decide between two very different versions of events. It makes no sense to make that decision without reference to the historical nature of the parties’ interactions,” the decision says. “In my view, this context is a necessary and important element of the defence put forward by the individual defendants that they were forced to resign.”

BMO also sought to strike out paragraphs from the defence alleging that the purpose of the lawsuit is to deter other advisors from leaving the firm, and rival firms from recruiting them.

According to the decision, the defence argues, “BMO has launched a series of such lawsuits against numerous investment advisors from various firms, including a series of failed injunction applications, who have left their employ in a concerted effort to intimidate its workforce into remaining in its employment. TD Waterhouse pleads that this constitutes an abuse of the process of this Honourable Court and an unfair restraint of trade designed to enhance BMO’s position in the marketplace at the expense of fair competition and the lawful mobility of its professional workforce.”

The court also let these paragraphs stand, ruling, they “… provide necessary particulars of the factual basis for the defendants’ abuse of process defence…”