In Silva v. Royal Bank of Canada, 2026 ONSC 3841 Justice Casullo had a situation where a 47 year old financial planner with 12 years service was terminated for allegations of just cause in relation to her obligations as a financial planner .
The Mutual Funds Dealers Association, of which the Defendant was a member, has certain reporting requirement;
- Pursuant to MFDA Policy No. 6, Information Reporting Requirements, Part B, 6.1, Members [RMFI was a Member] shall report to the MFDA:
(b) whenever a Member is aware, through a written or verbal complaint or otherwise, that the Member or any current or former Approved Person [Ms. Silva was an Approved Person] has or may have contravened any law or regulatory requirement, relating to:
(i) theft, fraud, misappropriation, forgery, money laundering, market manipulation, insider trading, misrepresentation, or unauthorized trading;
(ii) a breach of client confidentiality;
(iii) engaging in securities related to business outside of the Member;
(iv) engaging in an undeclared outside activity; or
(v) personal financial dealings with a client.
Upon her termination the Defendant the required report was filed.
They also filed another required from called a NOT which is described by the Judge as follows:
- The NOT is a regulatory filing made with the OSC when a registered individual leaves a sponsoring firm. As noted at the beginning of these reasons, The NOT is filed with the National Registration Database using Form 33-109F1, and is notice to all interested parties that the individual is no longer authorized to act on behalf of the sponsoring firm.
- One of the NOT’s purposes is to provide regulatory oversight, ensuring that if an individual leaves amid allegations of misconduct, future employers can conduct appropriate due diligence during the hiring process.
- The NOT, completed by Ms. Papaevangelou, provided that Ms. Silva was dismissed for cause, and reported that she had been investigated for possible material violations of fiduciary duties, regulatory requirements or compliance procedures. Further, Ms. Silva had repeatedly or materially failed to follow compliance policies or procedures. The “Details” section sets out the following:
The investigation determined that, contrary to RBC policies, the individual forwarded confidential client and RBC information to her personal email account and processed authorized transactions for clients prior to obtaining their signatures.
The OSC conducted their investigation:
- On October 30, 2018, four months later, the MFDA released the results of its review. The MFDA found Ms. Silva to be in breach of MFDA Rule No. 2.1.1(b) Standard of Conduct; MFDA Rule 5.1(b), Requirement for Records; and MFDA Rule No’s 2.5.1 and 1.1.2, Compliance by an Approved Person.
- The MFDA labeled the breaches as “minor in nature”. The MFDA took no action beyond a cautionary letter designed to prevent similar breaches in the future. Possible sanctions included a warning letter or formal disciplinary proceedings.
The Judge found that the Defendant failed to prove just cause and awarded 16 months notice
.However the Judge went on to award significant additional damages under the category of ” Loss of Earning Capacity”
- It has been accepted that damages for loss of earning capacity can be appropriate in a wrongful dismissal claim. The Court of Appeal in Boucher v. Wal-Mart Canada Corp, 2014 ONCA 419, 120 O.R. (3d) 481, at para. 103, commented that “a claim for future loss of income can arise in an employment context where a plaintiff has not recovered from the effects of the wrongdoer’s action and the plaintiff has thus suffered a loss of any earning capacity because of the wrongdoer’s tortious conduct.” This speaks to the principle of putting the plaintiff in the position she would have occupied had she not been wrongfully dismissed.
- The Court of Appeal declined to award Ms. Boucher with loss of opportunity damages. Ms. Boucher did not have an employment contract that guaranteed her employment to age 65. Instead, the Court of Appeal found she was entitled to be put in the position she would have been in if the contract had been performed: employment subject to dismissal in accordance with the terms of her contract.
- I find this case to be distinguishable from Boucher. While Ms. Silva was not guaranteed employment to age 65, her inability to find comparable employment was directly linked to the filing of the NOT by RBC. This wrongdoing has thus left Ms. Silva unable to work in the financial planning industry.
- In Ojanen v. Acumen Law Corporation, 2021 BCCA 189, the British Columbia Court of Appeal awarded $100,000 in loss of opportunity damages to Ms. Acumen, an articling student whose legal career was delayed by her wrongful dismissal. Ms. Ojanen’s employment was terminated for cause after the employer made unfounded allegations of plagiarism and disclosure of confidential information. Ms. Ojanen sought damages for the loss of income that she suffered as a result of not being able to become a lawyer at the end of her articling term. The trial judge found that Ms. Ojanen had no reasonable prospect for employment in the legal profession in Canada while the allegations brought by the Appellants were being pursued against her.
- In my view, Ms. Silva’s case is similar to Ojanen. Ms. Silva had no reasonable prospect for employment in the financial planning profession while the allegations brought by the NOT were filed.
- Ms. Silva testified that she had no intention of retiring before age 65 owing to her late arrival in Canada and desire to accrue CPP. This position was not shaken during cross-examination.
- Ms. Silva is currently 55 years of age. She has expressed a desire to return to the financial services industry as a financial planner. I am satisfied she will do so.
- Assuming she resumes her career given the dictates of my judgment, a damages award to age 60 would afford Ms. Silva five years to secure a position in the field, re-build her client base, and re-establish her clients’ trust. Five years is not unrealistic – both Ms. Silva and Mr. Agardi confirmed it took Ms. Silva eight years to build her first book of business.
- I am satisfied Ms. Silva has established on a balance of probabilities that she is entitled to an award for loss of earning capacity.
- Ms. McKeating has quantified Ms. Silva’s future income and benefits losses at $1,919,272 if Ms. Silva were to retire at 60. This figure includes adjustment for negative contingencies, including disability and mortality.
- I award Ms. Silva $1,919,272, to which shall be added pre-judgment interest.
The judge also said this about the Notice of Termination filed with the OSC:
Notice of Termination
- While I found that the wording contained in the NOT was not defamatory, in light of my reasons, it is now incorrect. RBC did not have cause to dismiss Ms. Silva.
- I order that RMFI file with the MFDA (now IIROC) a notice of correction of the NOT. If the parties cannot agree on the form of correction, I will remain seized of the issue to ensure that the final correction accurately reflects the outcome of the case
My Comments:
The damage claim for Loss of Future earning capacity is a concept well known in the personal injury field. Under tort law, you are entitled to be put in the same position as if the tort had not occurred . In other words, if you suffered a permenant loss of an arm and your prior employment was that of a carpenter, then you would calculate how much more money you could earn in the future had you not lost that arm
But contract law is different. In contract, you are to put in the same position had the contract been complied with. In this case, had the Defendant not alleged just cause, they would owe her 16 months pay in lieu. Period.
The Judge seems to have awarded these extra damages because of the filing by the employer of the NOT . The employer is required by law to file such a notice . The OSC investigated and four months later they virtually cleared her.
Therefore how can the employer be on the hook for filing a report that they are compelled by law to report. The OSC conducted the investigation and cleared her.
Yes there well have been a lingering stigma affecting her future career because of the Defendant’s position of just cause but how is that different from any employee who is fired for cause and then has to wait years for a Court to clear their name?
In this case, her name was cleared in 4 months. Therefore the stigma of the charges no longer exists.
The Judge also found that the Plaintiff was entitled to $150,000 for aggravated damages and $250,000 for punitive damages
For a copy of this case email me at barry@barryfisher.ca
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