Does a relationship between a brokerage house and a former client of the brokerage house constitute conversion?
British Columbia, Canada
The following excerpt is from Royal Canadian Legion, Branch No. 15 v. Burkitt, 2005 BCSC 1752 (CanLII):
In Kuhn v. Union Securities Ltd., 2002 BCSC 979, aff’d 2003 BCCA 683, this court considered numerous allegations of conversion arising from a relationship between a brokerage house (defendant), a broker formerly employed by the brokerage house and a former client of the brokerage house (plaintiffs). The plaintiffs were married, but held separate accounts with the defendant. The defendant had used funds held in a reserve account for the plaintiff broker to offset bad debts of the plaintiff broker’s clients. The defendant had also sold securities held in an account for the plaintiff client and applied the proceeds to offset debts owing by the client and debts owing by her husband, the plaintiff broker. The plaintiffs claimed that all of these transfers constituted conversions (¶ 5 and 6).
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