COURT FILE NO.: 13-59056 DATE: 2017/08/01 ONTARIO SUPERIOR COURT OF JUSTICE

B E T W E E N:

Michael Dawson Plaintiff/Responding Party – and – Halpenny Insurance Brokers Ltd., Halpenny Insurance Benefit Partners Ltd., Halpenny Insurance Group of Companies and Darryl Phippen Defendants/Moving Party

Counsel: Joseph Obagi, for the Plaintiff Elizabeth K. Ackman, for the Defendant, Halpenny Insurance Brokers Ltd.

Heard at Ottawa: March 24, and April 14, 2016

RULING ON MOTION FOR SUMMARY JUDGMENT

Corthorn J.

Overview

[1] Over the years, Michael Dawson dealt with the defendants for his personal insurance needs and financial management. He is the only child of the late James (Gordon) Dawson and Edna Dawson. Gordon and Edna also dealt with some, if not all, of the defendants.

[2] Gordon died in 2006 and Edna in 2011. At the date of her death, Edna’s estate was valued at slightly in excess of $2,000,000.

[3] In the months prior to her death, Edna executed a new will and a number of documents related to the financial management of her estate. She did so with the assistance of and in consultation with her financial advisor, the defendant, Darryl Phippen.

[4] Phippen is a principal with Halpenny Insurance Benefit Partners Ltd. (“BPL”). He was Gordon and Edna’s financial advisor for several decades. Phippen continued as Edna’s financial advisor after Gordon’s death.

[5] The changes made by Edna to her will in 2011 were such that Michael was no longer the sole beneficiary of Edna’s estate. Instead, a series of trusts were set up for Michael’s four adult children and Michael was to receive a monthly income for the balance of his life.

[6] After Edna’s death, Michael disputed the changes made in 2011 to Edna’s will. Pursuant to an order made by this Court in 2013, (a) the trusts were extinguished, and (b) Michael was declared the sole beneficiary of Edna’s estate.

[7] In this action, Michael claims damages for financial losses he alleges he suffered as a result of the changes made in 2011 to Edna’s will and the manner in which her estate was administered prior to the 2013 order. Michael alleges that the defendants are responsible for those losses.

[8] Halpenny Insurance Brokers Ltd. (“HIBL”) denies that it had any involvement whatsoever in the events giving rise to Michael’s action. HIBL says that its business is restricted to the sale of personal and commercial insurance policies; it is not involved in personal financial management or estate planning.

[9] In addition, HIBL says that it has neither a business nor a corporate relationship with BPL, other than that:

a) The two companies have, since 2001, operated out of the same premises;

b) BPL is a sub-tenant of HIBL in those premises; and

c) When the opportunity arises, the two companies refer clients to one another.

[10] HIBL says that it does not operate in partnership with BPL; HIBL and BPL do not have a partnership agreement and do not hold themselves out to the public as partners. HIBL asserts that there is no evidence that either of Gordon and Edna, the latter in particular, believed that HIBL and BPL were operating as a partnership.

[11] Phippen is neither an employee nor a shareholder of HIBL.

[12] HIBL seeks an order dismissing the claims against it on a summary basis.

The Issues

[13] The only parties who appeared on the motion were Michael and HIBL. The substantive issues on the motion for summary judgment are:

1. Is there an actual partnership between HIBL and BPL?

2. If the answer to Issue No. 1 is “no”, did HIBL and PBL hold themselves out as partners? Specifically, is there:

a) Objective evidence that HIBL and BPL held themselves out to the public as a partnership; and

b) Evidence that Edna subjectively believed that HIBL and BPL operated as a partnership and relied on that belief in her dealings with Phippen and BPL from 2006 to 2011?

Background

[14] The history of HIBL is as follows:

1912 - Percy R. Halpenny founded a property and casualty insurance brokerage. He named the business “Percy R. Halpenny and Son Ltd.” (“PRHSL”).

1955 - PRHSL was taken over by the founder’s son, Keith Halpenny.

1975 - Nick Leadbetter began his employment with PRHSL as an insurance broker.

1978 - Phippen commenced employment with PRHSL as a trainee insurance broker.

1980s - Phippen began to sell life insurance products.

1998 - Following the retirement of Keith Halpenny, Leadbetter purchased the majority of the shares in PRHSL. Leadbetter incorporated the business as HIBL and began to operate the brokerage under the new name.

[15] HIBL remains in business as an insurance brokerage for property and casualty insurance.

[16] Until the late 1990s, Phippen worked as an independent contractor with PRHSL. He was paid on a commission basis. In 1999, Phippen left PRHSL (or HIBL, as it had become). He worked as a financial advisor at DNL Insurance Agency Ltd. (“DNL”), a completely separate entity from both PRHSL and HIBL. Phippen was a shareholder in and an employee of DNL.

[17] Phippen continued to work at DNL until 2001. In that year, Phippen established his own business, providing life insurance, financial products, and group benefits plans. He spoke with Leadbetter, incorporated BPL, and began to share space with HIBL. Phippen secured Leadbetter’s agreement to the inclusion of “Halpenny Insurance” in the new corporation’s name. The two officers of and shareholders in BPL were and remain Phippen and David McCulloch.

[18] Since 2001, HIBL and BPL have continued to operate out of the same business premises on Laperriere Avenue in Ottawa. BPL is a sub-tenant of HIBL at those premises.

[19] In 1986, Phippen became the financial advisor for Gordon and Edna Dawson. At that time, he was working at PRHSL. Phippen continued as the Dawsons’ financial advisor until their respective deaths. Phippen dealt with both Gordon and Edna until Gordon’s death in 2006. Thereafter, Edna remained a client of Phippen’s until her death in 2011.

[20] In summary, Phippen:

• Began as the Dawsons’ financial advisor when working with PRHSL;

• Continued as their financial advisor when PRHSL became HIBL;

• Remained their financial advisor when he left HIBL in 1999 and for the two years that he worked at DNL (until 2001); and

• Further remained their financial advisor when he left DNL and formed BPL.

Evidentiary Issues

[21] There are two evidentiary issues to consider on the motion. The first is the requirement for corroborative evidence and the second is the admissibility of hearsay evidence.

Corroborative Evidence Required

[22] The requirement for corroborative evidence arises because of section 13 of the Evidence Act, R.S.O. 1990, s. E.23:

In an action by or against the heirs, next of kin, executors, administrators or assigns of a deceased person, an opposite or interested party shall not obtain a verdict, judgment or decision on his or her own evidence in respect of any matter occurring before the death of the deceased person, unless such evidence is corroborated by some other material evidence.

[23] Michael is an “heir” of Edna, a deceased person. Michael, as an “interested party”, relies on the evidence of Pierre Boucher and his late wife, Pierrette. The Bouchers were long-term neighbours of Edna and Gordon. The Bouchers’ evidence is in the form of their respective affidavits and transcripts from their respective cross-examinations.

[24] HIBL is an “opposite party” to Michael. Without the benefit of evidence to corroborate the evidence upon which it relies, HIBL is not in a positon to succeed on the motion for summary judgment. With respect to the nature of the relationship between HIBL and BPL, the evidence upon which HIBL relies is that of Leadbetter and, in corroboration, that of Phippen.

Admissibility of Hearsay Evidence

[25] A number of the individuals whose thoughts, beliefs, and statements form part of the record are deceased. Gordon and Edna are deceased. In support of Michael’s position on the motion for summary judgment, Pierrette Boucher swore an affidavit. Mrs. Boucher was cross-examined in January 2015. She died prior to the return of the motion.

[26] Michael’s position on the motion for summary judgment is premised on his belief as to his mother’s, and to some extent, his father’s state of mind with respect to Phippen’s association with the Halpenny name. Michael’s beliefs in that regard are based on conversations with and observations of Gordon and Edna when they were alive. The respective beliefs of Mr. and Mrs. Boucher are also based on their conversations with and observations of Gordon and Edna when they were alive.

[27] HIBL submits that the evidence on which Michael relies, including the evidence of Mr. and Mrs. Boucher, is replete with hearsay. Michael’s response is that to the extent that he, Mr. Boucher, and Mrs. Boucher rely on an out-of-court statement made by someone else, the reliance is only to the extent that the statement was made. Michael does not rely on the statements for the truth of their contents. Michael submits therefore that the statements upon which he relies do not amount to hearsay and are admissible as evidence on the motion.

[28] I find it difficult to comprehend how any one of Michael or the Bouchers would be able to establish Edna’s beliefs or state of mind with respect to Phippen, BPL, and HIBL without reliance, for the truth of their contents, on statements made by Edna. I agree with the submission on behalf of HIBL. The evidence on which Michael relies is replete with hearsay.

[29] Under the principled exception, hearsay evidence is admissible only if sufficient indicia of necessity and reliability are established (Brisco Estate v. Canadian Premier Life Insurance Co., 2012 ONCA 854, 113 O.R. (3d) 161, at para. 52, citing R. v. Khelawon, 2006 SCC 57, [2006] 2 S.C.R. 787, at para. 42). For the evidence upon which Michael relies with respect to his mother’s beliefs or state of mind, the necessity criterion is established because the individuals whose statements are relied upon are deceased.

[30] I find, however, that the reliability criterion is not met. The descriptions provided of statements made are very general in nature. The circumstances under which statements were made are not described. There is extremely little, if any, context provided within which to carry out a principled analysis of threshold reliability.

[31] As a result, I find that much of the evidence upon which Michael relies is inadmissible.

[32] However, even if the evidence were admissible, it would not alter my decision on the motion. To emphasize that point, when resolving the substantive issues, I have considered the evidence upon which Michael relies as if it were admissible in its entirety.

Issue No. 1 - Is There an Actual Partnership Between HIBL and BPL?

The Definition of “Partnership”

[33] Partnership is the relationship that exists between persons carrying on a business with a view to profit (Partnerships Act, R.S.O. 1990, c. P.5, s. 2).

[34] The Partnerships Act does not set out the criteria to be satisfied for a finding to be made that a partnership exists. Over time, indicia of a partnership have been judicially recognized. Those indicia include contributions in one or more ways to a common undertaking, sharing of profits and losses, a mutual right of control over or management of the business venture, filing income tax returns as a partnership, and owning joint bank accounts (Continental Bank Leasing Corp. v. Canada, [1998] 2 S.C.R. 298, at para. 24).

Evidence of Partnership Between HIBL and BPL

[35] Michael and HIBL agree that there is no actual partnership between HIBL and BPL, within the meaning of the Partnerships Act. That agreement is, however, subject to one exception.

[36] Michael submits that the Court is being denied evidence as to the true nature of the relationship between HIBL and BPL. Michael submits that I am in a position to draw an adverse inference against HIBL with respect to the nature of its relationship with BPL. The adverse inference, if drawn, would support a finding that HIBL and BPL have a profit-sharing arrangement of some kind and, as such, operate in partnership.

[37] The potential for an adverse inference to be drawn is said to arise from (a) the refusal or inability of HIBL to produce documents and other information requested by way of undertakings given on the cross-examination of HIBL’s principal, Leadbetter, and (b) HIBL’s refusal to have Leadbetter return for the continuation of his cross-examination—in particular on the answers to undertakings.

[38] In the alternative, Michael submits that (a) the potential for the adverse inference to be drawn must be determined on the basis of findings of credibility with respect to Leadbetter and Phippen, and (b) the credibility findings cannot be made without the benefit of oral testimony from Leadbetter and Phippen. Therefore, the existence of an actual partnership between HIBL and BPL is a genuine issue requiring a trial and the motion for summary judgment must be dismissed.

[39] The record includes answers to undertakings and correspondence between counsel with respect to refusals, undertakings, and the continuation of Mr. Leadbetter’s cross-examination. The record does not support the adverse inference suggested by Michael. In addition, the record does not support a conclusion that whether or not an adverse inference is to be drawn requires the oral testimony at trial of each of Leadbetter and Phippen.

[40] The level of scrutiny that Michael suggests be applied to the documents produced and information provided in satisfaction of undertakings might be appropriate if HIBL and BPL were large corporations with a significant financial and other records. They are two privately held corporations, run by one or two individuals. I am satisfied that additional scrutiny of the documents and information is not required for a determination of the motion for summary judgment.

[41] Michael highlights three elements of the relationship between HIBL and BPL in support of his request that an adverse inference be drawn on the motion. In the alternative, Michael submits that these elements of the business relationship demonstrate the potential for such an inference to be drawn at trial with the benefit of oral testimony from each of Leadbetter and Phippen:

i) The handwritten agreement between HIBL and BPL;

ii) The basis for the rent paid by BPL to HIBL with respect to the shared premises; and

iii) The referral of clients between HIBL and BPL.

[42] In the end, I find that there is no adverse inference to be drawn on the basis of either the answers to undertakings given by Leadbetter or the refusal of HIBL to produce Leadbetter for cross-examination on the answers. I also find that whether an adverse interest is to be drawn does not require an assessment of credibility that can only be made at trial.

Handwritten Agreement Between HIBL and BPL

[43] The only agreement between HIBL and BPL is a two-page, handwritten document prepared by Leadbetter during a meeting with Phippen in 2001 (the “Agreement”). The Agreement addresses the sharing of space at the premises, occupied only by HIBL before that time.

[44] The substantive contents of the Agreement are rudimentary. The second page sets out the expenses to be paid by HIBL and those to be paid by BPL. The second page ends with a list of the expenses to be paid by BPL; the final line reads, “Cost of your advertising , ”—I emphasize the comma because much was made on Michael’s behalf regarding that punctuation mark.

[45] Leadbetter’s evidence is that the handwritten Agreement was limited to two pages; the comma was not intended to identify the continuation of the Agreement on a third page. When cross-examined, Phippen was uncertain whether the Agreement was two or three pages. By way of undertaking, Phippen located and produced the only copy he has of the Agreement. Phippen’s copy of the Agreement is identical to Leadbetter’s; it is two pages in length.

[46] I accept Leadbetter’s explanation that, when meeting with Phippen in 2001 to discuss the potential to share space, his focus was not on the creation of a document that was grammatically correct, including with respect to punctuation. The Agreement was intended to reflect the understanding of the basis upon which HIBL and BPL would share space. The Agreement also set out the responsibility of each company for costs associated with their respective businesses. The Agreement was not critical to either of Leadbetter or Phippen in terms of the day-to-day operation of HIBL and BPL, respectively.

[47] Leadbetter’s certainty and Phippen’s lack of certainty as to the number of pages in the Agreement do not (a) support an adverse inference being drawn as to the existence of a third page of the Agreement, or (b) give rise to the potential for such an adverse inference to be drawn at trial based on oral testimony, including an assessment of the credibility, of Leadbetter and Phippen.

Sub-tenancy Based on Flat Fee Rent and not Cost-Sharing

[48] Pursuant to the Agreement, BPL paid rent on a flat fee basis. The rent was initially in the amount of $6,000 per month. Leadbetter and Phippen agreed that they would meet annually to review the expenses and determine whether any adjustments to the rent needed to be made either retroactively or prospectively.

[49] Leadbetter’s evidence is that from 2001, when the Agreement was written, to 2015, when the cross-examinations occurred, there had only been a handful of such reviews. He found the reviews to be acrimonious because Phippen was resistant to any increases in the rent to be paid by BPL. Phippen recalls less than a handful of reviews having occurred in that 14-year period.

[50] The flat fee rent paid by BPL to HIBL changed a number of times over the years. On one occasion, it changed because HIBL and BPL moved from one building to another on Laperriere Avenue. The rent also changed to address the implications of GST.

[51] There are contradictions between the evidence of Phippen and Leadbetter as to some of the minutiae related to the change in rent over time. For example, Leadbetter says the move from 1505 to 1550 Laperriere occurred in 2001. Phippen’s “best recollection” is that the move occurred in 2003.

[52] It is understandable that HIBL, as the primary tenant, would have specific records as to when the move from 1505 to 1550 Laperriere Avenue occurred. BPL, as the secondary tenant, has only the cancelled cheques or bank records identifying the monthly rent paid—regardless of the address out of which the two businesses operated. I find that the discrepancy with respect to when the move occurred does not give rise to an issue of credibility that can only be resolved based on testimony at trial.

[53] Documents have been produced as evidence of the reconciliations, or reviews of expenses, conducted from time to time between 2001 and 2015. It is understandable that the two companies would, at least on an intermittent basis, review the bases for the calculation of the rent being paid by BPL to ensure that the amount was reasonable.

[54] The evidence does not support (a) an adverse inference being drawn based on the explanations for the changes in rent and in support of the existence of a partnership between HIBL and BPL, or (b) give rise to the potential for such an adverse inference to be drawn at trial based on oral testimony, including an assessment of the credibility, of Leadbetter and Phippen.

Referral of Clients Between HIBL and BPL

[55] As an indicium of a partnership or joint venture between HIBL and BPL, Michael relies on the admission from Leadbetter and Phippen that HIBL and BPL would, when possible, refer clients to one another. I find that the referral of clients between HIBL and BPL is nothing more than a natural consequence of (a) two businesses sharing space, and (b) the principals of the two businesses being familiar with one another from their time together as employees of PRHSL.

[56] The evidence with respect to the referral of clients between HIBL and BPL does not support (a) an adverse inference being drawn in support of the existence of a partnership between HIBL and BPL, or (b) give rise to the potential for such an adverse inference to be drawn at trial based on oral testimony, including an assessment of the credibility, of Leadbetter and Phippen.

Summary

[57] I find that whether HIBL and BPL were operating as a partnership raises a genuine issue requiring a trial. I also find that I am able to fairly determine that issue by applying the fact-finding powers set out in rule 20.04 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. The use of these powers leads to a fair and just result that serves the goals of timeliness, affordability, and proportionality in light of the litigation as a whole (Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, at para. 65).

[58] Michael submits that a “good hard look” at all of the evidence to date demonstrates that there are a number of different ways to interpret the evidence of Leadbetter and Phippen with respect to the business arrangement between BPL and HIBL. I disagree.

[59] Based on the record before me, and applying the fact-finding powers pursuant to rule 20.04(2.1) of the Rules of Civil Procedure, I am satisfied that HIBL and BPL were not operating as a partnership within the meaning of section 2 of the Partnerships Act.

[60] However, the issue of whether a partnership existed between HIBL and BPL does not end with a determination that there was no actual partnership between the two companies.

Issue No. 2 - Did HIBL and BPL Hold Themselves Out as Businesses Operating in Partnership?

The Test for “Holding Out”

[61] There is the potential for a finding of liability against HIBL if it is determined that HIBL and BPL held themselves out as partners. That potential basis for liability is found in section 15(1) of the Partnerships Act:

Every person, who by words spoken or written or by conduct represents himself or herself or who knowingly suffers himself or herself to be represented as a partner in a particular firm, is liable as a partner to any person who has on the faith of any such representation given credit to the firm, whether the representation has or has not been made or communicated to the persons so giving credit by or with the knowledge of the apparent partner making the representation or suffering it to be made.

[62] Michael has the onus of establishing that, by the manner in which they conducted business, HIBL and BPL held themselves out to the public as partners. Michael points to factors such as the contents of the HIBL website, which includes information regarding BPL, and the similar, if not identical, logos used by HIBL and BPL over time.

[63] If Michael is able to establish that HIBL and BPL held themselves out as operating in partnership, the onus then shifts to HIBL to establish that it and BPL “clearly conveyed to the public that they were not partners” (Bet-Mur Investments Limited v. Spring (1994), 20 O.R. (3d) 417 (S.C.), at p. 6).

[64] There is a third step in the analysis. Even if Michael establishes that HIBL and BPL held themselves out as partners, and HIBL does not establish clear communication to the contrary, Michael must still establish that Edna “gave credit” to BPL based on the partnership as held out to the public (Ibid). This third step requires consideration of (a) Edna’s subjective beliefs about Phippen, BPL and HIBL, and (b) the extent, if any at all, to which Edna relied on these beliefs in her dealings with Phippen.

[65] Based on the record before me, and applying the fact-finding powers pursuant to rule 20.04 of the Rules of Civil Procedure I am able to determine the third step of the analysis. I find that Michael is unable to satisfy the onus with respect to the subjective portion of the test for “holding out”. The evidence does not support findings that Edna (a) subjectively believed that HIBL and BPL were partners, and (b) gave credit to Phippen in that regard when dealing with him.

[66] As a result, it is not necessary for me to consider the first two steps in the analysis. I therefore turn to the third step in the analysis.

Subjective Belief of Partnership Not Established

[67] Counsel for HIBL used the term “speculation dressed up as evidence” to describe the evidence upon which Michael relies in his effort to satisfy the third part of the analysis with respect to HIBL and BPL holding themselves out at as a partnership. I agree with that description.

[68] When the evidence is considered in its totality, including the requirement for corroboration, it is insufficient to support a finding that Edna believed that when dealing with Phippen she was dealing with HIBL because of a partnership between HIBL and BPL.

Beliefs as to Edna’s State of Mind not Supported by Evidence

[69] Michael, Mr. Boucher, and Mrs. Boucher provided evidence as to what they thought, suspected, and, on occasion, believed as to Edna’s state of mind with respect to Phippen and his ties to HIBL. The bases provided in support of their respective thoughts, suspicions, or beliefs are tenuous. To the extent that such bases were provided, they were eroded on cross-examination.

[70] Michael, Mr. Boucher, and Mrs. Boucher each acknowledged that they had less than full knowledge of the business operations of HIBL and BPL. In the absence of full knowledge regarding HIBL and BPL, each of Michael, Mr. Boucher, and Mrs. Boucher made assumptions about Phippen and his relationship with HIBL. They believed that Edna made the same assumptions. I find that there is no basis for any of their respective assumptions and beliefs in that regard.

[71] Michael admits that he has “no actual knowledge, information or belief as to the business arrangements which presently exist or historically existed between the various companies”. Despite that lack of knowledge, his evidence is that he “can state” that Edna’s knowledge, information and belief would have been the same as his, “namely that … Phippen, is an employee or associate of Halpenny Insurance Brokers.” Michael goes so far as to add, “[i]ndeed, I suspect that if my father were alive, he would also echo that belief.”

[72] On cross-examination, Michael acknowledged that (a) when his father was alive, he did not discuss investment matters with his parents, and (b) following his father’s death, he did not discuss such matters with his mother. Michael’s lack of knowledge as to his parents’ and, subsequently, his mother’s financial affairs is reflected in the fact that he was not aware until his mother’s death that her estate was valued at slightly in excess of $2,000,000.

[73] On cross-examination, Michael acknowledged that at no time did his father ever state explicitly that if Phippen was not with HIBL the Dawsons would not have had their investments with him.

[74] The affidavits of Mr. and Mrs. Boucher are virtually identical in wording. Therein, they state their respective observations of what Edna knew about the internal arrangements at HIBL and what made sense to Edna (i.e. that she was dealing with HIBL). They also address what was in Edna’s mind, with each of them stating, “In her mind, her relationship was with Halpenny Insurance, the old established insurance brokerage, and not with Darryl Phippen, whom [Edna and I] both thought was merely their representative.”

[75] I find that the Bouchers did not, in either their respective affidavits or on cross-examination, provide sufficient bases for their beliefs as to what was Edna’s state of mind as it related to Phippen, BPL, and HIBL.

[76] Mr. Boucher admitted on cross-examination that “The only thing I know is that Gordon did a lot of dealings through Halpenny and that’s about it…”

[77] Mrs. Boucher acknowledged that, following Gordon’s death, Edna gave her a business card with Phippen’s name on it. The card was for BPL. Mrs. Boucher communicated by telephone with Phippen and met with him (together with Edna) on at least one occasion. Yet, on cross-examination, Mrs. Boucher denied being aware of the existence of BPL. She also admitted that she “didn’t know much about Halpenny”.

Emphasis on the Halpenny Name is Unwarranted

[78] I have also considered the evidence with respect to (a) the manner in which Gordon handled himself in his business and personal affairs, (b) the lack of any evidence that Gordon dealt with HIBL for his and Edna’s personal insurance, and (c) the Dawsons’ continuing relationship with Phippen, including when he was not with either HIBL or BPL.

[79] The descriptions given of Gordon include that he was an astute business person; in Michael’s words, “[o]ne of the best I ever met”. Mr. Boucher described Gordon as “financially astute”. Michael and Mr. Boucher agree that Gordon was careful to research the individuals with whom he dealt and to not simply rely on the name of the company with whom the individual was associated.

[80] There is contradictory evidence as to how Gordon was first introduced to Phippen. Michael’s evidence is that Gordon was introduced to Phippen by Percy R. Halpenny. Gordon and Mr. Halpenny are said by Michael to have met in the late 1950s. Michael describes Mr. Halpenny as a “very good acquaintance” of Gordon’s. Phippen recalls being introduced to Gordon by an employee of PRHSL. According to Phippen, Gordon had recently retired from his work as an insurance broker and was looking for a financial advisor.

[81] Regardless of who introduced Gordon to Phippen, I find that the relationship the Dawsons formed with Phippen was a personal one and not dependent on the brokerage with which Phippen was affiliated over time. Both Michael and Mr. Boucher admit that Gordon was aware that Phippen was with DNL, and not HIBL, from 1999 to 2001. Yet, that break from HIBL did not cause Gordon to move the Dawsons’ investment portfolio away from Phippen and/or DNL.

[82] Michael and the Bouchers emphasize the references that Gordon and/or Edna made to one or more of “Halpenny Insurance Brokers”, “Halpenny Insurance” or “Halpenny” as indicative of the importance to the Dawsons of Phippen’s association or affiliation with HIBL. For the following reasons, I find that emphasis to be unfounded:

• It is uncontradicted that Leadbetter met Gordon on only one occasion. It was a casual meeting and occurred before Leadbetter began to work with Keith Halpenny at PRHSL.

• There is no evidence that the Dawsons ever placed their personal insurance with HIBL. From Gordon’s days working in the insurance industry, he knew a number of insurance professionals and placed his and Edna’s personal insurance with one of those individuals.

[83] Michael’s evidence is that, to the extent Gordon ever discussed his investments and insurance with Michael, he only ever referred to “Halpenny Insurance Brokers” and in doing so could only have meant HIBL. Assuming that Michael’s evidence in that regard is admissible, it is not corroborated in any way by either Mr. or Mrs. Boucher.

[84] There is no evidence from Michael as to the manner in which Edna referenced the company with which Phippen was affiliated from 2006 to 2011.

[85] In their respective affidavits, the Bouchers say that the Dawsons never mentioned “Halpenny Benefit Partners Ltd.”. Their evidence in that regard (a) overlooks that “Halpenny Insurance Benefit Partners Ltd.” [emphasis added] is the proper name of the company with which Phippen is affiliated, and (b) fails to consider the potential for one or both of the Dawsons to refer to that company by the short form of “Halpenny Insurance” or even “Halpenny”.

[86] In summary, the evidence as to the references made over time by Gordon and/or Edna to one or more of “Halpenny”, “Halpenny Insurance”, and “Halpenny Insurance Brokers” does not support findings that Edna (a) believed that Phippen was with HIBL, and (b) relied on that belief in her relationship with Phippen.

Edna’s Reliance on the Bouchers is Overstated

[87] Michael’s evidence is that following his father’s death, his mother “relied on the Bouchers’ expertise entirely.” In their affidavits, the Bouchers describe themselves as Edna’s “confidants” following Gordon’s death.

[88] From the evidence of the Bouchers on cross-examination, it is clear that they were not as close to Edna or as privy to her financial matters as Michael suggests or as they describe in their affidavits:

• Mr. Boucher described Edna as “hard-headed” and someone who was not “pushed around” by Gordon, Mr. Boucher, or anyone else.

• When Gordon was alive, the conversations that Mr. Boucher had with him with respect to investments were “very limited”.

• Following Gordon’s death, the conversations that Mr. Boucher had with Edna were of a “casual nature”.

• In any event, Edna appeared to Mr. Boucher to be satisfied with the investment advice she was receiving. She never voiced any concerns with respect to the investment advice she was receiving from Phippen.

• In the months after Gordon died, Mrs. Boucher assisted Edna with income tax documents and helped her set up a document filing system that would allow Edna to manage on her own. Mrs. Boucher described Edna as “a very good learner.”

• After Gordon died, Mrs. Boucher did not have detailed discussions with Edna about her investments.

• Mrs. Boucher considered Edna to be competent and extremely lucid. Mrs. Boucher had no concerns about Edna in that regard.

[89] The Bouchers’ evidence does not corroborate Michael’s with respect to the degree of Edna’s reliance on them. I find that Edna was not reliant on the Bouchers to assist her with substantive decisions related to financial management.

Summary

[90] Whether HIBL and BPL held themselves as operating in partnership is not a genuine issue requiring a trial. I am able on the basis of the record before me to determine that issue.

[91] I find that there is no evidence to support the beliefs expressed by Michael with respect to Edna’s state of mind as it relates to Phippen and his relationship with HIBL, in particular based on HIBL and PBL holding themselves out as operating in partnership. In any event, if I am wrong in that regard, the Bouchers’ evidence when considered individually and collectively does not amount to the corroboration required pursuant to section 13 of the Evidence Act.

[92] Michael is unable to satisfy the third part of the three-step analysis with respect to HIBL and BPL holding themselves out as operating in partnership. Accordingly, his claim against HIBL fails.

Other Matters

[93] Michael requested that summary judgment be granted in his favour against HIBL. That request was made without a notice of cross-motion having been delivered. The parties were permitted to make additional written submissions as to whether Michael was entitled to request that relief in the circumstances.

[94] Given that summary judgment is granted in favour of HIBL, Michael’s cross-motion, if allowed on a procedural basis, would have been dismissed in any event.

Disposition

[95] HIBL’s motion for summary judgment in the form of an order dismissing Michael Dawson’s claim against HIBL is granted.

Costs

[96] In the event the parties are unable to agree upon costs of the motion for summary judgment, they may make written submissions as follows:

a) The submissions shall be limited to a maximum of four pages, exclusive of a bill of costs;

b) Written submissions shall comply with Rule 4 of the Rules of Civil Procedure;

c) Hard copies of any case law or other authorities relied on shall be provided with the submissions and shall comply with Rule 4 of the Rules of Civil Procedure with respect to font size;

d) The submissions, the documents referred to therein, case law, and other authorities, shall be on single-sided pages;

e) Written submissions shall be delivered by 5:00 p.m. on the twentieth business day following the date on which this Ruling is released; and

f) In the event any party wishes to deliver a reply to the costs submissions of the opposing party, the reply submissions shall be delivered by 5:00 p.m. on the twenty-fifth business day following the date on which this Ruling is released. Reply submissions shall comply with paragraphs (a) to (d) above.

Madam Justice Sylvia Corthorn

Released: August 1, 2017