Scott Gfeller

Following dismissal of a civil action arising from a failed mortgage investment through a self-directed RRSP, the successful defendants sought costs.

The plaintiff alleged negligence, breach of fiduciary duty, and contractual breaches against multiple TD entities after his lawyer misappropriated mortgage funds and failed to register a mortgage.

The court held that the defendants were entitled to costs as wholly successful parties and that Rule 49 consequences applied because they achieved a better result than their pre-trial offer to settle.

Costs were awarded on a partial indemnity basis to the date of the offer and substantial indemnity thereafter, though the court reduced the amounts claimed for duplication and excess time.

Total costs of $63,000 inclusive of HST and disbursements were fixed.

The plaintiff invested $136,500 from a self-directed RRSP in an arm’s-length mortgage arranged through his lawyer, who later misappropriated the funds and fabricated a registered mortgage.

The plaintiff sued TD Waterhouse and TD Canada Trust, alleging breach of contract, fiduciary duty, negligence, and failure to detect the fraud in administering the RRSP mortgage investment.

The court held that a valid mortgage administration agreement existed but imposed only limited administrative obligations on the defendants as a discount brokerage and bare trustee.

The defendants owed no duty to investigate the validity of the investment, the borrower, or the security, and reasonably relied on the plaintiff’s lawyer’s representations and undertakings.

The court further found no fiduciary relationship, no negligence, and concluded the claim was statute‑barred under the Limitations Act, 2002 because the plaintiff failed to exercise reasonable diligence after early defaults and other warning signs.