Court of Appeal for Ontario

DATE: 20221019 DOCKET: C70201

Simmons, Paciocco and Zarnett JJ.A.

BETWEEN

Anne Elizabeth Fair Plaintiff (Appellant)

and

BMO Nesbitt Burns Inc., Adam Raymond Fair, Ashley Christina Abbott, and Adam Raymond Fair and Ashley Christina Abbott, Estate Trustees on Behalf of the Estate of the Late Lloyd Fielder Fair Defendants (Respondents)

Counsel: Alfred S. Schorr, for the appellant Nicolette Holovaci, for the respondent BMO Nesbitt Burns Inc. J. David Harris-Lowe, for the respondents Adam Raymond Fair, Ashley Christina Abbott, and Adam Raymond Fair and Ashley Christina Abbott, Estate Trustees on Behalf of the Estate of the Late Lloyd Fielder Fair

Heard: October 3, 2022 by video conference

On appeal from the orders of Justice Chris de Sa of the Superior Court of Justice, dated December 1, 2021, with reasons reported at 2021 ONSC 7845.

Reasons for Decision

[1] Shortly before his death on November 23, 2016, Lloyd Fielder Fair changed the beneficiary designations on three investment accounts he held with the respondent BMO Nesbitt Burns Inc. (“BMO Nesbitt”). Before the change, the beneficiary of the accounts was the appellant Anne Elizabeth Fair – Mr. Fair’s wife of approximately 10 years. After the change, the beneficiaries were Mr. Fair’s children from a former marriage, the respondents Adam Raymond Fair and Ashley Christina Abbott.

[2] The appellant learned of the change after Mr. Fair’s unexpected death. Alleging that the change was a breach of an agreement she had with Mr. Fair, the appellant brought an action. She sued BMO Nesbitt, alleging that it violated a duty to advise her of the change when it occurred. And she sued Mr. Fair’s Estate and his children, alleging a constructive trust over the proceeds of the investment accounts based on the doctrine of unjust enrichment.

[3] On a motion for summary judgment, the action was dismissed.

[4] The motion judge dismissed the appellant’s action against BMO Nesbitt because it was premised on a duty to disclose, and no such duty existed. After referring to the fact that Mr. Fair’s accounts were not held jointly with the appellant, and to the duty of confidence in a bank-customer relationship, he found that: “There is also no obligation either in [statute] or common law to notify third parties about an individual's beneficiary choices. I agree with BMO Nesbitt Burns, that to impose such an obligation would be an absolute breach of that individual's privacy and their right to dispose of assets as they choose.”

[5] The appellant argues that the motion judge erred in failing to find that there was a genuine issue requiring a trial with respect to her claim that BMO Nesbitt is liable for failing to disclose the change in beneficiary. She submits that BMO Nesbitt is not a bank but an investment advisor, so the motion judge’s reference to bank-customer privacy was off point. The evidence disclosed that the appellant and Mr. Fair both had investment accounts with BMO Nesbitt, and although the accounts were not jointly owned, BMO Nesbitt shared information about the performance of the investments in each account with both of them. She points out that an investment advisor “has a duty to ensure that the client is fully informed as to all material matters relevant to his/her investment portfolio. Non-disclosure is a breach of this duty”: Davidson v. Noram Capital Management Inc. (2005), 13 B.L.R. (4th) 35 (Ont. S.C.), at para. 53.

[6] We do not accept these arguments. Although the motion judge erred in referring to a bank-customer relationship, the error was inconsequential. His essential finding, that there was nothing in the record to support the existence of the duty to disclose the change, was free of error.

[7] The appellant and Mr. Fair both maintained separate investment accounts at BMO Nesbitt. With the consent of Mr. Fair and the appellant, BMO Nesbitt shared information about the performance of the investments in those accounts with each of them. However, the sharing of information about investment performance, with consent of the owners of each investment account, does not create a duty on the financial institution to disclose account changes made by one owner, to the other owner. Mr. Fair did not consent to BMO Nesbitt disclosing the change to the appellant. Nor was there any evidence that the appellant had informed BMO Nesbitt of her contention that there was an agreement between her and Mr. Fair governing beneficiary designations.

[8] The appellant’s reliance on Noram is misplaced. [1] The duty referred to there was to disclose matters material to the account holder’s investments. In this case, the appellant claims BMO Nesbitt should have disclosed a matter relating to Mr. Fair’s investment accounts, not those of the appellant.

[9] The motion judge dismissed the action against Mr. Fair’s Estate and his children. He noted that the claim was asserted on the basis of Moore v. Sweet, 2018 SCC 52, [2018] 3 S.C.R. 303. In that case, Ms. Moore had an agreement with the holder of a life insurance policy to be designated and maintained as its beneficiary. Ms. Moore paid premiums to keep the policy in force. In violation of the agreement, the policy holder designated Ms. Sweet as the insurance policy’s beneficiary. Although Ms. Sweet was innocent of any wrongdoing, Ms. Moore’s claim to the proceeds of the insurance succeeded on the basis of unjust enrichment. Ms. Moore’s payment of premiums and loss of the benefit of her agreement to be maintained as beneficiary constituted a deprivation that corresponded to Ms. Sweet’s enrichment, for which there was no juristic reason.

[10] The motion judge disagreed that Moore was applicable. He found that there was no conduct of the appellant that was analogous to the payment of premiums by Ms. Moore. And, pivotally, he found that “apart from the [appellant’s] assertion, there is nothing that would support the existence of an actual ‘agreement’.” He noted that s. 13 of the Evidence Act, R.S.O. 1990, c. E.23, required corroboration in certain cases, and that here “[t]here is no written agreement or domestic contract as contemplated in s. 55 of the Family Law Act, R.S.O. 1990, c. F.3]. Even the [appellant’s] characterization of the agreement is itself unclear. The specific accounts and assets that were the subject matter of this ‘agreement’ [have] changed.”

[11] The appellant submits that the motion judge erred in these findings. Her principal submission is that the motion judge was wrong not to consider the appellant’s evidence that there was an agreement about beneficiary designations sufficient to raise a genuine issue requiring a trial. She argues that she performed her end of the bargain by designating Mr. Fair as the beneficiary of her BMO Nesbitt accounts. She submits that s. 13 of the Evidence Act does not apply to her claim, and in any event the beneficiary designations provide the necessary corroboration. The appellant also argues that the motion judge should not have dismissed her claim without resorting to the enhanced fact-finding powers conferred on a summary judgment motion judge.

[12] In our view, it was open to the motion judge to view the appellant’s evidence as her best foot forward and as insufficient to form the basis of a Moore v. Sweet claim. In Moore, the agreement that formed the basis of the claim was clearly established. It not only required Ms. Moore to pay the policy premiums, and the policy holder to designate Ms. Moore as the beneficiary, it required him to maintain that designation: at para. 5. This is consistent with the law relating to testamentary dispositions – for a party to be bound to make a will a certain way, the agreement must provide that the will is not to be revoked. And that agreement must be proven by clear and satisfactory evidence: Edell v. Sitzer (2001), 55 O.R. (3d) 198 (S.C.), at para. 58, aff’d (2004), 187 O.A.C. 189 (C.A.), leave to appeal refused, [2004] S.C.C.A. No. 372.

[13] Here, the appellant’s affidavit simply asserted that “[Mr. Fair] and I had agreed that save only for the monies from Hydro One all of the other investments that both of us had would pass on to the survivor in the event that one of us should die.” It gave no particulars as to when or how that agreement was made.

[14] Moreover, the description in the affidavit had to be considered with other descriptions given on Ms. Fair’s examination for discovery. There the agreement was described as one that provided that Mr. Fair would leave the appellant his whole estate except for the funds from Hydro One, although the appellant did not dispute that Mr. Fair’s children were entitled to receive what his will left for them. Later in the examination for discovery, the agreement was described as one covering all investment accounts, not just those on which Mr. Fair had designated the appellant as beneficiary, even though no claim was made for the proceeds of an account on which Mr. Fair had not made any beneficiary designation.

[15] On this evidence, the motion judge was entitled to find that the appellant’s “characterization of the agreement is itself unclear” since the subject matter of the purported agreement had changed. That finding was sufficient to distinguish this case from the facts in Moore in which a clear agreement was found. Regardless of whether corroboration under s. 13 of the Evidence Act is required, the beneficiary designations that Mr. Fair made in favour of the appellant (and those she made in favour of Mr. Fair) do not assist her, as they are revocable and therefore equivocal on whether there was a clear agreement to maintain them in effect without change.

[16] The motion judge’s findings as to whether there was a genuine issue requiring a trial, and whether it was necessary to resort to the additional fact-finding powers the summary judgment rule provides for in order to make that determination, are entitled to deference: Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, at paras. 80-81. We see no basis to interfere.

[17] For these reasons, the appeal is dismissed. The respondents are entitled to their costs of the appeal fixed in the following amounts: BMO Nesbitt – $10,000; The Estate of Lloyd Fielder Fair, Adam Raymond Fair, and Ashley Christina Abbott – $7,500. These amounts are inclusive of disbursements and applicable taxes.

“Janet Simmons J.A.”

“David M. Paciocco J.A.”

“B. Zarnett J.A.”

[1] Noram was speaking of a duty owed by an investment advisor who is a fiduciary. The appellant did not expressly plead in her statement of claim that BMO Nesbitt was in a fiduciary relationship with her.