On February 11, 2014, the Quebec Court of Appeal rendered its
judgment in Succession Huppé c. Valeurs
mobilières Banque Laurentienne,2014 QCCA 294 confirming a judgment of the
Superior Court which had rejected an investor's claim against his
investment advisor and the latter's brokerage firm because the
investor had waited too long before denouncing the renegade.
Mr. Huppé was a Hydro-Québec retiree. At the
beginning of December 1999, he entrusted a portfolio worth some
$319,222 to one Mr. Duplessis of Valeurs Mobilières Banque
Laurentienne (VMBL), whom he authorized to effect securities
transactions in his name with the account which Mr. Huppé
held with BNP. Mr. Duplessis behaved himself at first, but by
September 2000 had taken matters into his own hands: Mr.
Huppé noticed that Mr. Duplessis had been making
unauthorized margin calls. Mr. Huppé warned Mr.
Duplessis to cease and desist, but continued their business
relationship nevertheless. Mr. Duplessis paid no heed.
In January 2001, Mr. Huppé noticed additional unauthorized
transactions. Although the value of his portfolio had by then
grown to $350,135, Mr. Huppé lost faith in Mr.
Duplessis. It was only in June 2001, however, that he began
to complain about his investment advisor, and not before May 2002
that he issued instructions to BNP to close his brokerage
account. By this time, however, Mr. Huppé had suffered
The Superior Court initially concluded that Mr. Duplessis had,
indeed, committed a fault with respect to Mr. Huppé, by
failing to consult and seek authorization from the latter, and by
engaging in speculative transactions. The responsibility of
VMBL was also engaged as Mr. Duplessis had been acting on their
behalf. But Mr. Huppé's claim for damages was
refused. According to article 1479 of the Civil Code of
Quebec, he had been responsible for mitigating his own damages
("A person who is liable to reparation for an injury is
not liable in respect of any aggravation of the injury that the
victim could have avoided"), and this he had failed to
do. Had Mr. Huppé withdrawn his mandate from Mr.
Duplessis in January of 2001, i.e. then when he had noted for the
second time that Mr. Duplessis was out on a limb, he would not have
suffered any loss.
It bears mentioning that neither party had established the cause
of the disappearance of the amounts claimed, and that Mr.
Huppé's bank statements did not show movements which
would have supported an allegation of fault against either Mr.
Duplessis nor VMBL.
While it is not surprising that a brokerage firm or its advisors
would be held accountable for unauthorized transactions on a
client's account, it is noteworthy that a considerable degree
of responsibility lies with clients who employ their services, at
least to the extent that the latter are aware of suspicious
movements. The principle applies regardless of one's
degree of experience. Indeed, although Mr. Huppé was
no novice, the Court of Appeal stressed that even an inexperienced
investor had to exercise a minimum amount of diligence. The
scope of article 1479 of the Civil Code of Quebec is also
illuminated: by the time Mr. Huppé had noted the suspicious
account movements for a second time, he was still ahead, having
profited significantly for Mr. Duplessis' maneuvers. But
the prospect of a future loss had, by then, reared its
Succession Huppé c. Valeurs mobilières Banque
Laurentienne,2014 QCCA 294
Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
Under the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan Act and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions.
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