The Supreme Court has just released its judgment in the case of Galambos v. Perez, 2009 SCC 48 (CanLII). The opinion of the court was written by Cromwell J., his second[1. His first was R. v. Godin, 2009 SCC 26 (CanLII)], I believe, since his installation on the court, and concurred in by all eight other members of the court.
This judgment might be of special interest to the bar as it deals with relations between a bookkeeper for a small firm and the bankrupt firm. Essentially, the bookkeeper and de facto office manager loaned large sums of money to the firm; when the firm went bankrupt and she became merely an unsecured creditor, she sued for negligence, breach of contract and breach of fiduciary duty. At trial the plaintiff’s claims were rejected. The B.C. Court of Appeal overturned the trial judgment, finding that there had been a breach of a fiduciary obligation.
The Supreme Court reinstated the trial judgment, ruling that the B.C. Court of Appeal had over-extended the scope of fiduciary obligations. The plaintiff was not in fact in a power-dependency relationship with the defendant; not all power-dependency relationships are fiduciary in nature, and an ad hoc obligation does not arise in the absence of an undertaking, express or implied, by the fiduciary; and the absence of the power in the defendant to affect the interests of the plaintiff negates the existence of any fiduciary obligation.