No Keays damages for fired investment adviser

The Supreme Court of Canada has rejected a last-ditch effort from an investment adviser who claimed he should receive Keays damages after being fired and subsequently losing a stable of high-value clients.

The top court, as per usual, did not say why it rejected the leave to appeal application stemming from Merrill Lynch Canada Inc. v. Soost. The case involved Kurt Soost, at the time a financial adviser at Merrill Lynch, who was dismissed by the employer, allegedly for cause.

Soost fired back with an action for damages against the employer for wrongful dismissal, along with various tort claims. Alberta’s Court of Queen’s Bench in October 2009 agreed with his arguments and issued awards totaling $2.2 million — $600,000 in pay in lieu of notice, and $1.6 million in damages for reputation and book of business or goodwill.

But last August the Alberta Court of Appeal quashed the $1.6-million award, saying it was baseless.

“It purports to compensate for matters which the law does not recognize as compensable,” the court ruled. “And it lacks a factual basis. Furthermore, it appears to contain an element of double counting for the lack of reasonable notice; that has already been compensated for by the award of $600,000. The extra $1.6 million award cannot stand, and so must be quashed.”

The appeal court emphasized the fact that Soost’s main issue following his firing was the fact that it took him three weeks to find another position in the industry. That job also was with a less prestigious firm that lacked the resources of Merrill Lynch.

“But that detriment was a product of dismissal, not caused by want of pay in lieu of notice. The law gives no right to such working notice,” said the court.

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