Executive Summary: Key Legal and Evidentiary Issues

• Defendants Scotia sought summary judgment on the pleadings under Civil Procedure Rule 13.03 to dismiss the Plaintiffs' claim.
   
• Plaintiffs alleged misrepresentation, negligence, breach of fiduciary duty, and contravention of National Instrument 31-103 related to their late father's Life Income Fund.
   
• Central to the motion was whether a special relationship existed between Scotia and the Plaintiffs sufficient to ground a duty of care.
   
• Courts have previously found no prima facie duty of care between a bank and a client's adult children acting as prospective estate or account beneficiaries.
   
• No fiduciary relationship was found because Scotia never undertook to act in the best interests of the Plaintiffs, only their late father.
   
• Justice McDougall concluded the claim disclosed no special relationship and was therefore certain to fail, granting summary judgment.
   

Facts of the case

The Plaintiffs, Mike Ryan Hall, Scott Gordon John Hall, and Matthew Hall, are sons of the late Gordon Hall, who died intestate on January 11, 2021. Mr. Gordon Hall's wife, Rose Dunphy, is the administrator of his estate. The Plaintiffs are children from a previous marriage and have no biological relationship to Ms. Dunphy. Mr. Gordon Hall, and subsequently his estate, were clients of Scotia (The Bank of Nova Scotia, Scotia Securities Inc., and The Bank of Nova Scotia Trust Company); the Plaintiffs themselves were never clients of Scotia. The dispute concerns a Life Income Fund ("LIF") opened by Mr. Gordon Hall at Scotia on January 13, 2017, which originally named the three Hall brothers and Ms. Dunphy as equal beneficiaries. The Plaintiffs allege their father exhibited cognitive decline beginning in March 2018, and that on September 14, 2018 he signed documents altering the beneficiary percentages to increase Ms. Dunphy's share, around the same time his bank accounts were made joint with her. Ms. Dunphy was appointed Power of Attorney in October 2018 and later added as POA on the LIF account. No spousal waiver was ever signed by Ms. Dunphy, meaning that under Pension Benefits Regulations NS Reg. 200/2015, the LIF balance was payable to her by default as surviving spouse rather than to the named beneficiaries. The Plaintiffs claim they received conflicting representations over the years, including from Ms. Dunphy's counsel and a Scotia representative during related Probate proceedings, suggesting the LIF would be paid directly to the named beneficiaries. As of the February 24, 2026 hearing, the LIF remained undistributed, subject to an interlocutory injunction.

Policy terms and contractual clauses at issue

The decision focuses on the regulatory framework governing the LIF rather than a specific contractual clause. Under Pension Benefits Regulations NS Reg. 200/2015, Schedule 4A, section 15, the remaining LIF balance on death is payable first to a surviving spouse, unless the spouse is legally disentitled through a valid written waiver, in which case it is payable to a named beneficiary, and if neither exists, to the owner's estate. Because no spousal waiver was signed, the regulations directed the LIF to Ms. Dunphy by default. The Plaintiffs also referenced National Instrument 31-103, including provisions on Know Your Client, Trusted Contact Person and Vulnerable Client Protection, and Suitability Determination, arguing these informed the standard of care owed by Scotia, though they clarified they did not plead the National Instrument as an independent cause of action.

Reasoning and analysis

Justice McDougall applied the test for summary judgment on the pleadings under Rule 13.03, which requires the claim to be treated as true but dismissed if it discloses no reasonable cause of action, is based on a claim within another court's exclusive jurisdiction, or is otherwise clearly unsustainable. The Plaintiffs' claims were grouped into four categories: misrepresentation, negligence, breach of fiduciary duty, and alleged contravention of the National Instruments. For the negligence and misrepresentation claims, the court applied the Anns/Cooper framework, which requires a prima facie duty of care grounded in proximity and reasonable foreseeability. The court found the Plaintiffs could not articulate a basis for a special relationship with Scotia other than as beneficiaries of their father's LIF, and concluded that the duty of care, if any, ran between Scotia and Mr. Gordon Hall and then his Estate, not directly to his adult children. This conclusion was supported by Alberta decisions, including Tymkow v. Rusnak and MacDonald v. Taubner, which found no direct cause of action for a client's son or beneficiary absent acting through the estate's legal representative. On the fiduciary duty claim, the court applied the Hodgkinson v. Simms and Elder Advocates of Alberta Society v. Alberta frameworks, finding no undertaking by Scotia to act in the best interests of the Plaintiffs, only of their late father. Lastly, the court found the National Instruments do not create a private right of action, and since the Plaintiffs had clarified they were not pleading the Instruments as an independent cause of action, this point was moot. The court also declined the Plaintiffs' request for an adjournment under Rule 13.03(4) to amend the pleadings, finding that no amendment could cure the fundamental absence of a special relationship between the parties.

Ruling and outcome

Justice McDougall held that, regardless of whether the facts as pleaded were true, no special relationship existed between the Plaintiffs and Scotia capable of grounding a duty of care, rendering the claim certain to fail. The motion for summary judgment on the pleadings was allowed, and the claims by the Plaintiffs against the Defendants were dismissed, making Scotia the successful party. The decision expressly does not affect the Estate's own ability to seek relief, if it chooses to do so. No amount was awarded to either party, as the decision addressed only the dismissal of the claim; the parties had not yet made submissions on costs, with the court directing that further written submissions be made within 30 calendar days if the parties could not agree.