COURT OF APPEAL FOR ONTARIO

DATE: 2002-11-12 DOCKET: C36131

BEFORE: AUSTIN, CHARRON and CRONK JJ.A.

BETWEEN:

GARNET LEON CHESEBROUGH Plaintiff (Appellant)

• and -

STEPHEN WILLSON and MERRILL LYNCH CANADA INC. Defendants (Respondents)

COUNSEL: Paul McKeever, for the appellant Barbara L. Grossman, for the respondents

HEARD: October 30, 2002

On appeal from the judgment of Justice John E. Sheppard of the Superior Court of Justice dated March 12, 2001.

BY THE COURT:

[1] The appellant investor appeals from the dismissal of his action against the respondent advisor and corporate brokerage firm for damages for breach of trust, breach of fiduciary relationship, breach of contract and negligence. In essence, the appellant claims damages for losses flowing from his investment advisor’s advice regarding the sale and acquisition of shares.

[2] First, the appellant argues that the trial judge erred in failing to characterize the nature of the relationship between the parties as fiduciary in nature. He acknowledges that the relationship of broker and client is not, in and of itself, a fiduciary relationship but one that is dependant on the particular facts. The relevant factors that must be considered in determining this question are set out by the Supreme Court of Canada in Hodgkinson v. Simms, [1994] 3 S.C.R. 377.

[3] Although the trial judge correctly instructed himself on the governing principles of law, the appellant contends that he made an error of law in applying those principles to the evidence before him. We are not satisfied that the trial judge erred as contended. It is apparent from the trial judge’s thorough and detailed reasons for judgment that he adverted to the correct test and inquired into all of the relevant factors on this question. We are also satisfied on our review of the record that his findings of fact are supported by the evidence. Consequently, there is no basis to intervene with respect to the conclusion that the relationship was not fiduciary in nature.

[4] Second, the appellant contends that the advisor’s conduct was wrongful in several respects. Most of his complaints relate to the sale of his Bre-X shares and the advisor’s failure to follow his instructions to repurchase Bre-X shares. The appellant contends that, were it not for the respondents’ wrongful conduct, he would have retained his Bre-X shares for a longer period, sold them at the height of the market before the fraud was discovered, and made an additional extraordinary profit. The appellant also contends that the advisor wrongfully recommended that he purchase shares of Minera Rayrock, an investment which he states was inappropriate for him.

[5] Although counsel for the appellant couched many of the issues related to the advisor’s conduct in terms of legal principles, it is our view that their determination was entirely fact driven. It is not the role of this court to substitute its view for that of the trial judge in the absence of any palpable and overriding error committed in the trial process. The appellant has not satisfied us that there was any such error. We see no basis to interfere with the trial judge’s conclusion that the appellant had not made out any case to support a finding of liability.

[6] Third, the appellant raises a number of issues related to the calculation of damages. In light of our conclusion on the grounds of appeal related to liability, we do not find it necessary to deal with these additional issues.

[7] The appeal is dismissed with costs fixed at $15,000 plus disbursements and GST.

Released: November 12, 2002

“A.McN.A” Signed: “Austin J.A.” “Louise Charron J.A.” “E.A. Cronk J.A.”