The respondents held a non-discretionary investment account with the appellants.
The appellant investment advisor made an unauthorized sale of the respondents' shares.
The trial judge found a fiduciary relationship existed, that the advisor breached his fiduciary duty, and awarded damages based on a lengthy mitigation period, along with solicitor and client costs.
On appeal, the Court of Appeal held that the relationship was contractual, not fiduciary, because the account was non-discretionary and the clients retained control.
The Court found the unauthorized sale was a breach of contract, not ratified by the clients, but that the clients had a duty to mitigate their losses within a brief reasonable period.
Because the share price dropped during that brief period, the clients suffered no loss in share value and were only entitled to recover transaction costs.
The appeal was allowed, the cross-appeal dismissed, and the trial costs award was set aside.
