Court File and Parties

Court File No.: CV-11-419585 Date: 2020-03-09 Ontario Superior Court of Justice

Between: ZHE CHEN, Plaintiff – and – TD WATERHOUSE CANADA INC. also known as TD WATERHOUSE, Defendant

Counsel: Yixin Wang, for the Plaintiff Scott K. Gfeller, for the Defendant

Heard at Toronto: March 6, 2020

Before: F.L. Myers J.

REASONS FOR JUDGMENT

The Motion

[1] TD Waterhouse Canada Inc. requests an order for summary judgment dismissing this action without a trial. The parties have delivered voluminous affidavits and conducted thorough cross-examinations out of court. The issues in the case in the main turn on contemporaneous documents and findings of law. I find the process undertaken by the parties provides me with the evidence required to fairly and justly adjudicate the dispute and is a timely, affordable and proportionate procedure, under Rule 20.04(2)(a) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.

[2] For the reasons that follow, I grant an order for summary judgment dismissing this action.

Background to Mr. Chen’s Claims

[3] As a new immigrant to Canada in 2006, Mr. Chen secured employment as an insurance advisor at RBC Insurance. He had worked as a sales manager for an advertising company in China. Prior to coming to Canada, Mr. Chen traded in securities on Chinese stock markets.

[4] In September, 2006, Mr. Chen opened discount brokerage accounts with TD Waterhouse. There is no dispute that Mr. Chen intended to use the accounts to execute his own trades. He was not intending to utilize any advisory services that might otherwise be offered by TD Waterhouse. Mr. Chen intended to and did function as a high-volume day trader using the online services offered by TD Waterhouse to execute the trades that he ordered. Mr. Chen also opened trading accounts with the brokerage arms of BMO and CIBC.

[5] Mr. Chen had applied for and had been granted margin accounts by TD Waterhouse. Under a margining arrangement, TD Waterhouse agreed to lend money to Mr. Chen to pay for varying portions of the stocks that he bought. This is a highly regulated and sophisticated form of investment strategy. Brokers are limited by industry standards and regulations as to how much they can lend on various trades. They require their customers to pledge the stocks that they buy as security for their margin debts. They may also require customers to provide additional collateral as security to protect the brokers from the risk that the purchased stocks decline in value and leave the customer unable to repay the amounts they borrowed to buy the stocks.

[6] Mr. Chen proposed to operate two accounts with TD Waterhouse. He intended to buy US stocks in a US dollar account. However, to provide security, he proposed to deposit Canadian cash in a Canadian dollar account. At the time he applied for the accounts, a TD Waterhouse representative told Mr. Chen that this would be acceptable to the broker and it was.

[7] In 2008, international credit markets sustained a major downturn. The stock markets were particularly volatile for a period of time. Regulators and market participants were particularly engaged. Mr. Chen began trading in significant volumes in November, 2008. Mr. Chen was not vigilant or proactive to ensure that he kept his accounts within his margining or borrowing limits. TD Waterhouse provided online tools through its WebBroker™ website to allow customers to trade and to manage their portfolios. The website disclosed to customers their margining status including showing when their accounts were under-secured.

[8] Mr. Chen did not always keep his accounts within security limits as required. Commencing in November, 2008, TD Waterhouse made several “margin calls” to Mr. Chen. That is, they called him to tell him that he had posted insufficient security for the amount that he had borrowed based on the value of the shares in his US accounts. During these calls the broker warned Mr. Chen that if he did not post more security immediately, the broker would enforce its rights to reduce its risk and bring Mr. Chen’s accounts back into acceptable margin balance. It could, for example, seize his collateral, sell some or all of his shares, or take other steps as will be discussed below. After each margin call, Mr. Chen deposited Canadian dollars into his Canadian account to increase the collateral that he pledged.

[9] In April, 2009, Mr. Chen deposited three cheques into his Canadian account and each of them bounced. The cheques were for $20,000, $20,000, and $50,000 respectively. After each cheque was deposited, Mr. Chen actively traded and borrowed on the increased credit provided by the deposits before his cheques were returned by his bank.

[10] Mr. Chen testified that he had no recollection of depositing the third cheque – for $50,000. TD Waterhouse was unable to locate a copy of this cheque. But it is referred to both in the accounting records and in contemporaneous communication within the brokerage. In cross-examination, at question 1107, Mr. Chen agreed that he wrote three NSF cheques to the broker from April 17, 2009 to May 6, 2009.

[11] After Mr. Chen bounced his third cheque on May 6, 2009, TD Waterhouse determined to decrease its exposure on Mr. Chen’s accounts. It made two telephone calls to him that went unanswered. The broker’s internal records suggest that voicemails were left warning Mr. Chen of the need to decrease his US debit balance. As discussed below, nothing turns on the truth of the content of these records. Under the terms of the margining arrangement, TD Waterhouse was not required to provide notice to Mr. Chen before it acted to decrease its exposure on his accounts.

[12] On May 8, 2009, TD Waterhouse took the $140,800 in Mr. Chen’s Canadian collateral account, converted it to US dollars, and applied the funds to reduce Mr. Chen’s outstanding debt of US$132,499.47 for shares purchased in his US account. The application of Mr. Chen’s collateral to repay his borrowings left a small balance owning by Mr. Chen to the broker in his US account.

[13] Mr. Chen argues that this action did nothing to alter the net economic position of the broker but it caused him to lose money on the foreign exchange transaction. He argues that TD Waterhouse is liable in negligence for taking steps that did not protect him from foreign exchange loss.

[14] Initially Mr. Chen claimed that TD Waterhouse froze his accounts after May 8 and it also caused CIBC and BMO to freeze his trading accounts with those institutions. But the contemporaneous records show that Mr. Chen continued to trade in his TD Waterhouse accounts in very high volumes over the succeeding month. Mr. Chen provided no evidence concerning his trading privileges in his BMO and CIBC accounts. However, TD Waterhouse admits that it did ultimately limit Mr. Chen’s privileges to buy new shares or to transfer shares out of his accounts. It allowed him to sell shares so as to decrease his margin debt. Mr. Chen claims that these limits caused him to lose unspecified trading opportunities. He offered no evidence as to whether he could have made whatever trades he desired through his other brokerage accounts.

[15] In early 2010, TD Waterhouse provided documentation to Mr. Chen and the CRA under the Income Tax Act and applicable regulations. TD Waterhouse reported each sale of shares made by Mr. Chen to CRA in a separate T-5008 form. In these forms, TD Waterhouse reported the proceeds of disposition received by Mr. Chen. However, it did not report the cost paid by Mr. Chen to purchase the shares that he sold. The slips electronically filed by TD Waterhouse told the government only the price received by Mr. Chen on each sale. It did not calculate the gain between the price Mr. Chen paid and the sale price received for each share. Box 20 of the T-5008 form provided for the cost of the shares to be reported. TD Waterhouse left that box blank in all of its T-5008 forms for all of its customers at all material times.

[16] Also in early 2010, TD Waterhouse provided to Mr. Chen a T-5008 Summary. This is a form approved by CRA in which the broker reported to its customers the cost and sale price data for the year aggregated by each stock. Unlike the filings with the government that report each sale individually, the T-5008 Summary sent to clients provides the cost, sale price, and gain/loss figures for each series of securities in the aggregate. So, for example, if Mr. Chen had bought and sold shares of Nortel Canada Inc. numerous times in 2009, TD Waterhouse would have reported the proceeds of each individual sale to CRA in a separate electronic T-5008 slip and it would have reported the overall cost, proceeds, and net loss to Mr. Chen in his T-5008 Summary.

[17] Mr. Chen acknowledged that the T-5008 Summary was available to him online in a timely way. TD Waterhouse electronic records show that Mr. Chen accessed tax records related to his accounts several times before tax time in 2010. However, the electronic tracking records do not pinpoint which tax records Mr. Chen reviewed or retrieved. Mr. Chen also acknowledges that the T-5008 Summary that TD Waterhouse provided for him gave all the information that he required to file his T-1 income tax return to properly claim his capital gains and losses for the 2009 taxation year had he wished to do so.

[18] Mr. Chen’s evidence is that his tax accountant told him in early 2010 that because Mr. Chen had suffered a net capital loss in his trading activities in 2009, he was not required to file an income tax return. The accountant told him that he only needed to file a return if he was going to use his net capital losses from 2009 to offset future capital gains. Mr. Chen says that he had become disillusioned with day trading so he was not interested in trading in future to make capital gains. Therefore, he decided that he would not file his income tax return for taxation year 2009. This was a terrible decision.

[19] In October, 2012, CRA sent a notice of assessment to Mr. Chen. CRA knew all the proceeds received by Mr. Chen for his sales of shares as reported by TD Waterhouse in the T-5008 forms that it filed. But CRA did not have any information as to what Mr. Chen had paid for the shares. CRA determined to treat the full proceeds as capital gains (as if Mr. Chen had not paid anything for the shares). As noted above, Mr. Chen had engaged in high-volume day trading in 2009. By looking only at the proceeds that Mr. Chen received from his many share sales, CRA assessed his total income of $5,219,671 and, with penalties and interest, assessed his taxes due at $4,121,880.43. In fact, Mr. Chen had employment income of only $9,655 in 2009 and he had sustained a net loss from his trading ventures.

[20] Mr. Chen ultimately filed his 2009 income tax return and had the erroneous tax assessment corrected. He claims that in the interim, he lost his job with RBC Insurance and could not find alternative employment due to the massive tax assessment issued by CRA. The assessment also caused Mr. Chen to suffer anxiety and distress.

[21] Mr. Chen argues that TD Waterhouse is liable to him in negligence for failing to correctly fill-in the T-5008 forms that it filed with the CRA to report the cost associated with each sale transaction for which it reported the proceeds. He relies on the statutory duty of TD Waterhouse to file correctly and fully the T-5008 forms that it is required to send to CRA. He argues that had TD Waterhouse properly fulfilled its statutory duty to report both the cost and proceeds of his shares in the appropriate boxes on the T-5008 forms, CRA would not have determined that he had any capital gains or taxable income in 2009 at all.

Analysis

Contract Arguments

[22] The account agreements executed by Mr. Chen when he opened his margin accounts with TD Waterhouse resolve all of his complaints apart from the tax issue. The various account agreements entitle TD Waterhouse to take steps to decrease its exposure to market risks or to clients’ credit risks and to do so without notice to the clients. Case law refers to these contractual rights as “iron clad”. See: Shoaga v. TD Waterhouse at para. 11 et seq.

[23] Moreover, a customer who does not read the contracts generally remains bound by them. Mr. Chen argues however, that when he applied for his margin accounts, the TD salesperson led him to believe that he would be entitled to deposit Canadian funds as collateral for his US margin debt. He asserts that unless that person pointed out to him specifically the contractual clauses that allowed TD Waterhouse to convert his Canadian cash to US currency, the pre-contractual representation misled him.

[24] In my view, there was no misrepresentation on Mr. Chen’s evidence. Mr. Chen was entitled to deposit Canadian funds as collateral for his US margin debt as he was told. TD Waterhouse accepted Canadian cash as valid collateral and granted him US dollar credit based on his Canadian deposits. His margin calls were satisfied by deposits of Canadian cash as additional collateral.

[25] Mr. Chen does not allege that he was ever told that TD Waterhouse would not seize the collateral to apply to the debts in appropriate circumstances. That is what collateral is for.

[26] Mr. Chen is arguing that the oral representation that he would be allowed to deposit Canadian funds to support US borrowing was a promise that the Canadian collateral would not be seized or converted to US funds if TD Waterhouse enforced its rights. That would be an oral representation that is directly inconsistent with the terms of the written contracts and, in any event, it is not a reasonable interpretation of the representation made. [1]

[27] As a fallback, Mr. Chen argues that because he was told he could deposit Canadian funds to support US borrowings, and because the broker’s contracts are complex, onerous, contracts of adhesion, TD Waterhouse was required to point out specifically to him the terms that allowed it to apply his Canadian funds to US debt. See: Tilden Rent-A-Car Co. v. Clendenning.

[28] I agree that consumer contracts of adhesion are subject to different rules. In Tilden, the Court of Appeal discussed the situation when one picks up a rental car as follows:

In ordinary commercial practice where there is frequently a sense of formality in the transaction, and where there is a full opportunity for the parties to consider the terms of the proposed contract submitted for signature, it might well be safe to assume that the party who attaches his signature to the contract intends by so doing to acknowledge his acquiescence to its terms, and that the other party entered into the contract upon that belief. This can hardly be said, however, where the contract is entered into in circumstances such as were present in this case.

A transaction, such as this one, is invariably carried out in a hurried, informal manner. The speed with which the transaction is completed is said to be one of the attractive features of the services provided.

[29] Opening a margin account authorizing one to borrow substantial sums of money for risky and highly regulated stock market trading is not at all a “hurried, informal” affair analogous to renting a car at a pick-up counter. While the margin contracts are certainly pre-printed forms, they carry significant import and formality. There was a period of time between Mr. Chen signing the application for accounts and the broker’s approval of his application. He had time to read the voluminous documents and to ask questions about his rights and obligations. When he carried out his first trade, the agreements deemed him to have accepted their terms. I agree with Hoilett J. in Srivastava v. T.D. Waterhouse, at para. 47, this is not the type of agreement to which the Court of Appeal was referring in Tilden.

[30] The Cash Account Agreement signed by Mr. Chen sets out in plain language the security arrangements. It expressly entitles the bank to transfer collateral from one account to another without notice. Similarly, the broker can combine accounts and setoff account balances in different accounts expressly without notice to Mr. Chen. The same rights are repeated in the Margin Account Agreement.

[31] Stockbrokers’ rights to protect themselves from exposure to clients’ credit risk and trading risks are readily understood. Brokers are not required to take risks with their clients – whether FX risk or market risk. They are entitled to rely on their contractual rights whether the client is in deficit or not and to do so without notice. Paciorka v. TD Waterhouse, at paras. 65 to 67.

[32] As noted above, Mr. Chen sues in negligence rather than in contract. I note however that he relies on contract law to argue that TD Waterhouse had a duty to exercise its discretion in good faith, reasonably, and so as to minimize harm to him. He relies on Greenberg v. Meffert et al. and Bhasin v. Hrynew, 2014 SCC 71. Bhasin is of no assistance. There is no indication that TD Waterhouse lied to Mr. Chen or conducted itself at all in bad faith.

[33] Mr. Wang argues that Greenberg implies a contractual duty that TD Waterhouse would not interfere with Mr. Chen’s right to credit or that it would only interfere to cause minimum harm to Mr. Chen. I do not read the contractual duty to exercise discretion in good faith as creating a duty requiring a broker to place the client’s well-being ahead of its own interests. That would effectively be a fiduciary duty. It reverses the contractual relationship under which the broker has no obligation to share the risks undertaken by the customer.

[34] Cromwell J. warned against this type of argument in Bhasin at para. 86:

The duty of honest performance that I propose should not be confused with a duty of disclosure or of fiduciary loyalty. A party to a contract has no general duty to subordinate his or her interest to that of the other party.

[35] The contractual duty of good faith in this context generally refers to the obligation on a party with discretion to refrain from exercising its discretionary authority in a manner that undermines the purpose of the contract. For example, a real estate vendor with a duty to apply for rezoning cannot get out of the sale by failing to apply to the municipal zoning authorities diligently. Or, a car dealership franchisor cannot use its discretion as to the allotment of cars to its franchisees to ensure that they are unable to make their sales quotas in a year. See: McKinlay Motors Ltd. v. Honda Canada Inc.. Nothing alleged by Mr. Chen indicates that TD Waterhouse did anything to undermine the intention of the contracts. All the conduct alleged, combining his accounts, converting Canadian dollars to US funds, and limiting his future credit, were directly authorized and consistent with the parties’ relationship. The market was volatile. Mr. Chen imposed an FX risk by the manner that he chose to organize his borrowings, he bounced $90,000 in cheques while trading on the alleged deposits, and he did not proactively maintain his margin balance or respond immediately to messages left for him. I do not see any indication of a breach of any duty of good faith on the facts as asserted by Mr. Chen.

Negligence Arguments

[36] Concurrent liability may arise in tort even when the relationship among the parties is governed by contracts. Central Trust Co. v. Rafuse. The duty of care must be separate from the parties’ contractual duties although it can be limited by the contract terms. Here, the scope of any independent duty of care owing by TD Waterhouse is expressly limited by the contract to “gross negligence” and “willful misconduct”. Even if these contractual limitations did not apply, Mr. Chen has provided no evidence of there being a separate duty or standard of care in the industry that was breached by any act of TD Waterhouse.

[37] Mr. Chen argues that when TD Waterhouse converted his Canadian cash to US, it caused him to suffer a foreign exchange loss. I note that this is an argument about causation rather than one to establish a duty of care. Mr. Chen asks the court to take judicial notice of the fact that there generally is a small difference between the price we obtain when we sell currency as compared to the higher price we pay to buy currency. Mr. Chen says he suffered a loss of a few thousand dollars represented by that differential. I do not understand how that is so. To suffer that loss, Mr. Chen’s cash would have to be sold and then re-converted back into Canadian dollars at a lower rate. But here, Mr. Chen had no right to get his Canadian cash back. It was pledged to the broker who was entitled to apply it to Mr. Chen’s debt in his US account. When the broker converted the cash, it obtained the appropriate exchange rate and then applied the US equivalent of the Canadian cash to the US debt. There is no re-conversion into Canadian cash at a slightly more expensive buy rate to cause a loss to Mr. Chen.

[38] Absent a loss, I do not have to consider whether it was reasonably foreseeable to the broker that its acts would cause that loss so as to create a duty of care. Nor do I have to consider whether a duty of care will be recognized for pure economic loss in the circumstances. In my view, Mr. Chen has shown no negligence let alone gross negligence in how the broker managed his accounts.

[39] The same analysis applies to Mr. Chen’s claims that TD Waterhouse negligently limited his trading rights and caused him to suffer damages as a result. Mr. Chen has provided no evidence of any trades that he could not make or any losses suffered. In addition to this claim being a bald assertion that is unsupported by any evidence, Mr. Chen has provided no answer to the fact that he had accounts with other brokers in which he could have carried out any trades that he wished to make at the relevant time.

[40] The tax issue raised by Mr. Chen calls for a different analysis. Mr. Chen relies on a CRA booklet that is a guide for people who prepare T-5008 forms. It requires people who file T-5008 forms to make reasonable inquiries to determine the cost of the securities sold and to report that cost in box 20 on the T-5008 form. The legal status of the booklet is unclear. However, for the purposes of this motion, I am prepared to assume that TD Waterhouse had a statutory or regulatory duty to report cost information to CRA in each T-5008 form in which it reported a sale of shares and receipt of proceeds of disposition by Mr. Chen.

[41] Mr. Chen acknowledges that if TD Waterhouse breached a statutory duty by failing to fill-in box 20 on his T-5008 forms, that breach of statutory duty does not itself give him a common law right to sue for damages. See: The Queen (Can.) v. Saskatchewan Wheat Pool.

[42] Mr. Chen argues that but for the failure of the broker to fill-in his cost information on the T-5008 forms, he would not have been assessed $5 million of income by CRA and suffered as a result. Once again however, causation is not the test for a duty of care.

[43] A duty of care is created by a relationship of proximity between the parties and the foreseeability of harm as moderated by policies concerns. See: Anns v. Merton London Borough Council (1977), [1978] AC 728 (UK HL).

[44] The relationship between stockbrokers and their customers has previously been held to be sufficiently proximate to give rise to duties of care at common law. The content and extent of the duty (beyond carrying out trading instructions and acting honestly) is a question of fact in each case. See: Transpacific Sales Ltd. v. Sprott Securities, at para. 33 as discussed in Labricciosa v. TD Waterhouse Group Inc., at para. 9.

[45] TD Waterhouse argues that it files literally millions of T-5008 forms per year. Neither it nor any of its industry competitors filled-in cost information in box 20 of their T-5008 forms in 2010. CRA has never suggested that this was a problem or enforced the statutory duty to do so set out in the preparers’ guide booklet. Rather, CRA has approved the form of T-5008 Summary that TD Waterhouse provides to its customers to give them all of the information that they needed to file their annual income tax returns including the full calculation of their capital gains and losses. CRA’s formal approval of TD Waterhouse’s T-5008 Summary form is indicated by a CRA code that is shown at the bottom of the form. Moreover, TD Waterhouse has adduced evidence that the information available to stockbrokers can at times be insufficient to determine customers’ adjusted cost base for capital gains tax purposes. There can be additional considerations that customers may be able to bring to the ACB calculations in their income tax returns.

[46] The T-5008 Summary form notifies clients that the information in the form is to be utilized by them in their T-1 income tax returns.

[47] Moreover, TD Waterhouse argues that Mr. Chen received bad advice from his accountant when he or she told Mr. Chen that he did not need to file a tax return if he had no taxable income and he did not want to use his capital losses in future. Subsection 150(1.1)(b)(ii) of the Income Tax Act, RSC 1985, c 1 (5th Supp) requires taxpayers who dispose of capital property within the year to file tax returns even if they had no net income and would otherwise be exempted under s. 150(1.1). [2]

[48] Like Mr. Chen, TD Waterhouse does not use Mr. Chen’s breach of the statute to establish or negate a specific common law duty. Rather, TD Waterhouse argues that for it to have a duty of care to its customers with respect to the filing of T-5008 forms it would have to be reasonably foreseeable that its failure to fill-in box 20 would cause their customers to suffer compensable injury. In this case, it would have to be reasonably foreseeable that Mr. Chen would get wrong advice from his accountant or otherwise fail to file his income tax return in breach of the law and that CRA would then take an aggressive position that 100% of all proceeds of shares sold during a year were capital gains.

[49] TD Waterhouse argues that on the facts, there is no basis for the court to find that it ought to have reasonably foreseen in 2010 that despite providing the approved T-5008 Summary that includes all information Mr. Chen required to claim his capital losses in his income tax return and a notice to customers to report the disclosed information on their income tax returns, Mr. Chen would get wrong advice from his accountant, fail to file his tax return, and then CRA would assess him for a ridiculous amount of tax.

[50] Mr. Chen did not adduce any expert evidence suggesting that there are other facts or industry standards that existed in 2010 that might be a basis to find as a fact that TD Waterhouse owed a duty of care owed or that on the facts it breached any applicable standard of care. He offered no evidence to rebut the broker’s evidence that neither the industry standards committee - including representatives of all of the major brokerages - or CRA ever required brokers to fill-in cost information in box 20 of the T-5008 form and in fact, none of them did so. The industry and CRA expected customers to file their income tax returns to report their capital gains and to claim their proper capital losses with the information provided to them by the brokers in CRA approved T-5008 Summary forms.

[51] On the evidence before me, there is no issue requiring a trial. Mr. Chen offers no basis to argue that the law might recognize a duty of care on stockbrokers to provide cost information in T-5008 reporting slips to protect the customers from the risk of harm if they unlawfully failed to file their income tax returns and then CRA took aggressive enforcement positions. TD Waterhouse provided Mr. Chen with all applicable cost information in its T-5008 Summary so that he could file his income taxes as required by law.

[52] That is, despite the possible breach of regulatory or statutory duty, it is still not reasonably foreseeable on any evidence adduced before me that Mr. Chen would have suffered compensable injury by the manner of TD Waterhouse’s tax reporting. Moreover, even if TD Waterhouse owed a duty of care in filing T-5008 forms, the evidence is uncontested that it met the prevailing industry standard at the time. There is no evidence on which I could find as a fact (or that raises an issue requiring a trial) that the extent or scope of any such duty included filling-in cost information on each T-5008 form rather than providing cost information to each customer in the T-5008 Summary forms approved by CRA.

[53] I have repeatedly cast the duty in terms of “compensable” injury because Mr. Chen’s evidence of loss is weak at best. He ultimately filed his income tax returns and had CRA’s erroneous assessment reversed. He says that in the interim he lost his job because of the CRA assessment. However, his evidence was that he lost his job long before CRA made its assessment. He then tried to argue that there was some ubiquitous discussion of him laundering funds through his brokerage accounts prior to the tax assessment that caused him to lose his job. But he gave no account of when this might have occurred or how his employer came to know of it or ask him to resign because of it or what it had to do with CRA’s later assessment of capital gains tax. However, absent a duty of care on the facts and absent the breach of any applicable standard of care, I do not have to determine whether Mr. Chen suffered any compensable loss.

[54] I therefore grant summary judgment dismissing this action. As noted at the outset, this case comes down to very narrow points. TD Waterhouse was entitled to act as it did under the express terms of the contracts between Mr. Chen and the broker. In addition, there is no basis for TD Waterhouse to be held liable in negligence (let alone gross negligence) for Mr. Chen’s failure to file his tax return and the subsequent tax headache he endured. There are no facts in dispute on these issues. The contract issues are “iron clad”. TD Waterhouse met its burden to establish that these matters are fairly resolved summarily. Mr. Chen then failed to meet his evidentiary burden to rebut the evidence adduced by TD Waterhouse negating any the breach of any duty of care alleged.

[55] TD Waterhouse may deliver up to three pages of submissions on costs by March 13, 2020. Mr. Chen may respond with up to three pages of submissions to be filed by March 20, 2020. Both sides shall deliver costs outlines. Either may also deliver copies of any offers to settle on which they rely. Costs submissions shall be delivered to the court as searchable PDF attachments to emails to my Assistant. No copies of case law or statutory materials are to be included. References to case law and statutory materials, if any, are to be made as hyperlinks to or another freely accessible source embedded in parties’ costs submissions.

F.L. Myers J.

Released: March 9, 2020

Footnotes:

[1] I note that this is not a credibility issue. I accept that TD Waterhouse made the representation to which Mr. Chen has testified. I am not accepting the legal effect or drawing the inference that Mr. Chen seeks as doing so would be inconsistent with the contracts that he signed and inconsistent with any reasonable conception of how collateral works as Mr. Chen understood.

[2] Mr. Wang argued that Mr. Chen was not required to file a T-1 income tax return by s. 150 because he did not have to pay tax and therefore he did not qualify as a “taxpayer” under that section. However, s. 248(1) provides that the word “taxpayer” as used in the statute “includes any person whether or not liable to pay tax.”