Case information

Fiduciary duty — ad hoc fiduciary duty — Whether Court of Appeal erred in holding that respondent did not owe fiduciary duty to applicant — Torts — Breach of confidence — Damages — Whether Court of Appeal erred in selecting measure of damages for breach of confidence

Case summaries are prepared by the Office of the Registrar of the Supreme Court of Canada (Law Branch). Please note that summaries are not provided to the Judges of the Court. They are placed on the Court file and website for information purposes only.

The applicant provided insurance consulting services to hog farmers. It gathered relevant information about its clients’ loss histories and insurable risks and compiled that information in a format useful to underwriters. By pooling its clients’ insurance needs, the applicant was able to access favourable insurance premiums. Between 2008 and 2017, the applicant appointed the respondent as its broker of record for the purpose of negotiating with underwriters. In 2017, the applicant announced its intention to discontinue its business with the respondent. The respondent then successfully solicited 45% of the applicant’s business using the information generated by the applicant. The applicant sold its business to a third party in 2019. It sued the respondent for lost revenue and the corresponding diminution in the sale price of its business.

The trial judge found that the parties had a contractual relationship in which confidentiality of the applicant’s client information was an express term. He further found that the respondent was a fiduciary for the applicant. By using the confidential information to solicit the applicant’s clients, the respondent was in breach of contract, breach of confidence, and breach of fiduciary duty. Strict contract damages were not appropriate given the equitable nature of the respondent’s wrong. Damages were assessed in the full amount of lost revenue and diminution in sale price of the applicant’s business, as calculated by the applicant’s expert witness. The Court of Appeal allowed an appeal in part, holding that the legal requirements for a fiduciary relationship did not exist in this case. Accordingly, an equitable measure of damages was not appropriate. Damages were reassessed according to contract principles as calculated by the respondent’s expert.