Background: Rebecca Lee Boal filed a class action against International Capital Management Inc. (ICM) and its principals, John and Javier Sanchez, alleging breach of fiduciary duty. The defendants, ICM and affiliated holding companies, are accused of misleading clients into investing in Invoice Payment System Corporation (IPS), in which the Sanchez brothers had a substantial ownership interest.
Claims:
- Breach of Fiduciary Duty: Boal claimed the Sanchez brothers acted as fiduciaries by advising clients on investments, particularly IPS, without disclosing conflicts of interest or their financial benefits.
- Knowing Assistance and Knowing Receipt: Additional claims targeted holding companies for their alleged role in receiving and assisting in fiduciary breaches.
Legal History:
- Initial certification was denied in 2021, with appeals leading to the Ontario Court of Appeal’s 2023 decision allowing reconsideration of the certification regarding common issues and fiduciary duty.
Ruling:
- The Ontario Superior Court found that the fiduciary duty claim lacks commonality across the proposed class. Differences among clients’ sophistication, understanding of investment risks, and disclosure levels made individual assessments necessary.
- Consequently, the court ruled that the fiduciary duty claim, and related claims of knowing assistance and punitive damages, do not meet the certification criteria.
Conclusion: The motion for certification was dismissed, and the plaintiff was ordered to pay costs of $30,000.
