Court of Appeal for Ontario

Citation: Dodd v. RBC Dominion Securities Inc., 2009 ONCA 401

Date: 20090512

Docket: C47581

Between:

Dianne Dodd, Rhoda Dodd and Roy Warren Dodd

Plaintiffs (Appellants)

And

RBC Dominion Securities Inc. and J. Robin Southgate

Defendants (Respondents)

Before: Simmons, Blair and Epstein JJ.A.

Counsel:

James E. Virtue and Catherine R. Bruni, for the appellant

Michael Royce, for the respondent

Heard and endorsed orally: April 24, 2009

On appeal from the judgment of Justice J.N. Morissette of the Superior Court of Justice dated July 17, 2007.

APPEAL BOOK ENDORSEMENT

[1] The appellants appeal from the dismissal of their action for negligent misrepresentation.

[2] The issues in dispute focus on a meeting held on November 27, 1992. During the course of the meeting, Mr. Southgate, a vice-president of RBC DS made comments to the effect that Mr. Mott and Mr. Sartor were financial geniuses and great guys and “this is the opportunity of a lifetime, don't miss out on it.”

[3] Although the appellants raise several issues on appeal, their core submission is that the trial judge should have found RBC DS and Mr. Southgate liable for failing to warn the appellants about Mr. Mott's criminal conviction for fraud.

[4] We do not accept this submission. The trial judge made specific findings that RBC DS was not involved in the take-over proposal until after the transaction closed and that Mr. Southgate was not aware of the conviction on November 27, 1992 and, in fact, did not find out about it until 1996.

[5] The trial judge also made the following important findings:

• The appellants had not met Mr. Southgate prior to the November 27, 1992 meeting and did not meet with or speak to him subsequently.

• Mr. Southgate did not attend the meeting for the purpose of providing advice to the appellants or to convince the appellants to enter into a take-over deal.

• In fact, Mr. Southgate did not give the appellants any financial advice. Further, the appellants did not ask him about his background or involvement in the matter; he did not pretend to know anything about the industry, the product, or the proposed deal; and the appellants conceded he was not their adviser and not giving them professional advice.

• There was no proposal in place for a merger as of November 27, 1992.

• The appellants failed to take even the most basic steps to protect their own interests in their dealings with Mr. Mott and Mr. Sartor and would not have been deterred from entering into the transaction had they known about the conviction.

• Mr. Southgate's remarks were nothing more than puffery, and reliance on them was unreasonable and foolhardy.

[6] Even assuming that someone at RBC DS was aware of the conviction as of November 27, 1992 we see no basis on which to impute that knowledge to Mr. Southgate in the circumstances of this case. On the trial judge's findings, he had no due diligence obligations to the appellants at the time. If he is not liable, RBC DS is not vicariously liable.

[7] The effect of the appellants’ submissions is to ask us to reweigh the evidence and to revisit the findings of the trial judge. That is not our role.

[8] The appeal is therefore dismissed. Costs of the appeal are to the respondent on a partial indemnity scale fixed at $19,784.63 inclusive of disbursements and G.S.T.