Executive Summary: Key Legal and Evidentiary Issues

• Enforceability and interpretation of advisor agreements, including non-compete and confidentiality provisions, are central to the dispute.

• Alleged breaches of fiduciary, contractual, confidentiality, and exclusivity duties by the DKL Parties after leaving Sun Life are in issue.

• Claims against Assante for inducing breach of contract and knowing assistance in breaches of fiduciary duty are advanced by Sun Life.

• The adequacy and scope of document disclosure, including claims of privilege over certain communications and audio recordings, are contested.

• The appropriateness of Sun Life’s amendments to its counterclaim, especially the addition of civil conspiracy and related damages, is examined.

• Determination of remedies such as disgorgement of profits, injunctive relief, and the calculation of incentive loan benefits remains unresolved.

Facts of the case

Dale Keith Lamb and DKL Financial Services Inc. (the DKL Parties) acted as exclusive agents for Sun Life Assurance Company of Canada, selling insurance and mutual fund products under two advisor agreements. These agreements included confidentiality, non-solicitation, and non-compete clauses, and provided for “commissions on release” (CORe) payments to departing advisors, conditional on compliance with non-compete obligations.

On July 2, 2020, the DKL Parties gave notice of termination, effective July 16, 2020. Sun Life alleged that the DKL Parties breached the agreements by providing services for Assante Financial Management Ltd. and terminated CORe payments in September 2020. The DKL Parties filed a civil claim for non-payment of CORe commissions on October 13, 2020. Sun Life counterclaimed, alleging breaches of duty and that Assante induced and assisted in those breaches.

Policy terms and clauses at issue

Key terms included client exclusivity to Sun Life, confidentiality, a two-year post-termination non-solicitation and non-compete period, and the CORe commission payments conditional on compliance with these terms.

Procedural history and applications

Sun Life amended its counterclaim in March 2023 to remove damages claims and focus on declarations, injunctive relief, and disgorgement. Assante’s application to strike the counterclaim was dismissed, and Sun Life was later granted leave to further amend its counterclaim to add civil conspiracy and related damages, but not to broadly reinstate pecuniary damages. The court ordered further disclosure from the DKL Parties and Assante, including certain audio recordings, finding privilege was not established.

Outcome and ruling

Sun Life was granted leave to amend its counterclaim to add civil conspiracy and related damages, and obtained orders for further disclosure from the DKL Parties and Assante. The court denied reinstatement of broad pecuniary damages claims. No damages were awarded at this stage, and costs were ordered to be “in the cause,” to be determined at the end of the trial. The total amount of any costs or monetary award in favor of the successful party cannot be determined from this decision.