Court of Queen s Bench of Alberta

Transcription

1 Court of Queen s Bench of Alberta Citation: Kostic v CIBC Trust Corporation, 2017 ABQB 747 Between: Liliana Kostic Date: Docket: Registry: Calgary - and - Applicant CIBC Trust Corporation Respondent Memorandum of Decision of the Associate Chief Justice J.D. Rooke I. Introduction [1] This Decision is, in essence, about the right of the Applicant, Liliana Kostic (Kostic), to be defended 1, or paid defence costs (as defined below) by the Respondent, CIBC Trust Corporation (CIBC), in one or more court actions to which she is a defendant, but primarily in Piikani Nation and Piikani Investment Trust v. Raymond James, Liliana Kostic, et al., Action No (the P/RJ Action ). Put another way, it is about Kostic s right to have the cost of counsel in her defence in such action(s) paid for by CIBC, pursuant to contract documents through which she claims that right. 1 In the oral hearing, I referred to it as the duty to defend Transcript of November 22, 2016, p. 2, line 27 hereinafter using the format TR 2/27.

2 Page: 2 [2] More formally, allegedly after a refusal by CIBC, on demand by Kostic, to defend her, it came to our Court by an Originating Application filed, originally on February , now an Amended Amended Originating Application, filed August 26, 2016 (Application), in which Kostic sought two declarations: 1(g) Declaring that [CIBC] is under an immediate and ongoing obligation pursuant to the CIBC World Markets Inc. [operating as Wood Gundy] and Raymond James Ltd. contracts to defend and save harmless [Kostic] to pay forthwith and without delay any and all claims, losses, liabilities damages, costs, charges and expenses including legal fees as set out in the Affidavit of Kostic filed July 7, 2016, and 1(h) Declaring that [CIBC] breached its contractual duty to defend and hold Kostic harmless for any and all claims, losses, liabilities, damages, costs, charges and expenses including legal fees as set out in the Account Agreements from the date of first demand. [3] In the Third Party Claim of Raymond James and Kostic in the P/RJ Action, filed February 8, 2007, Kostic sought indemnification from liability, but did not specifically seek a right to counsel to defend or defence costs. Such relief was, however, sought against CIBC/Wood Gundy by a Third Party Claim filed by Kostic on June 20, 2007, and by her Reply to Defence by CIBC of Third Party Defendant, filed February 5, [4] This being primarily a contract based claim, basic principles would be a good way to consider the matter before the Court. Thus, the main issue is the primarily determined on what the contract provides: McLean, a Minor by his Litigation Guardian, Wilson v. Jorgenson et al, 2005, 78 O.R. (3d) 308, para. 5; Cooper et al v. Farmer s Mutual Insurance Company (2002), 59 O.R. (3d) 417, para. 11, where the Court there held, similar to my Decision herein, for a right to counsel to so apply; and Stewart Title Guarantee Company v. Zeppieri, 2009 CanLII 2329 (Ont. S.C.), at para. 46. [5] Further, the principles of contract interpretation apply to indemnity and save harmless clauses (as argued in the CIBC Brief, and para. 31 of the Kostic Reply Brief): Stewart Title, at para. 15. See also: Cargill Gas Marketing Ltd. v. Alberta Northeast Gas Limited, 2008 ABQB 59 (McMahon, J.), at para. 25; Amalgamated Transit Union Local 1374 v. Greyhound Canada Transportation Corporation, 2009 ABQB 166 (Erb J.); and Galichowski v. Shaw GMV Pontiac Buick Hummer Ltd., 2008 ABQB 672 (Hughes J.). [6] There is no real issue of valuable consideration here between CIBC and Raymond James (Kostic Reply Brief, paras , referencing Yellowhead Regional Library Board v. Spruce Grove (Town), 1981 ABCA 369). II. Executive Summary [7] I have come to a number of preliminary conclusions that can, to some extent, limit the subsequent analysis. While I will provide brief analysis below, the results are as follows:

3 Page: 3 (1) while Kostic continues to use the term save harmless 2, that would include an indemnity from any liability found against Kostic 3, which cannot be determined at this time 4 not until, at the earliest, any liability is found against Kostic at trial 5 what remains is the duty to provide the cost of counsel to defend; (2) CIBC has no liability to defend under the CIBC/Wood Gundy contract as no claim was advanced by Piikani against Kostic during, or applicable to the time, it operated (it would be otherwise if the P/RJ Action raised issues of liability against Kostic during that time TR 48/16 26; 86/24 27; 89/3-4); (3) any right of Kostic to defence costs, applies, absent further application, only to the P/RJ Action; and (4) the Web Use Agreement is not applicable on the evidence on the record in this Application. [8] After the total analysis, I have concluded, substantively, that Kostic has a right to be defended, or have her reasonable defence costs 6 paid, by CIBC. III. Background of the Application [9] While it may relate potentially to other actions, the focus of the defence sought by Kostic in this Application relates primarily on the action of the P/RJ Action. Indeed, as I later find 2 The law generally relates to insurance contracts, but can, with recognition of differences arising in the insurance industry, relate to any contract. Stewart, paras , 25, 46, and 182, confirms that save harmless is broader than indemnification [from liability], but includes that a party should never have to put his hand in his pocket in respect of a claim covered by the terms of the indemnity agreement [and] require to fund, on an ongoing basis, the reasonable defence costs of the party against whom a claim was made arising under an [agreement] issued by the indemnitor, except in cases of the member s gross negligence or wilful misconduct (emphasis added of key terms, and the express limitation see caution on the latter below). 3 That the three ( save harmless, indemnity and defence costs ) are separate, see, in an insurance context, where there is express coverage (TR 72/22 25; 73/11-13): Bernard Alie v. Bertrand & Frere Construction Company, 2002 CanLII (ON CA), at paras. 177 and 178 (see also para. 182 on the duty to defend deriving from a presumptive duty to indemnify), which includes the following: the duty to defend arises where the claim alleges acts or omissions following within the policy coverage, while the duty to indemnify only arises where such allegations are proven at trial the duty to defend is broader than the duty to indemnify. See also: Sattva Capital Corp. v. Creston Moly Corp., [2014] 2 SCR 633, 2014 SCC See TR 4/ To which Kostic agrees, as seen in paras. 16 and 22 23, and is repeated in paras of Kostic s Reply Brief, the latter emphasizing that what is sought is defence costs under clauses 22, 31 and 37 of the RJL Terms and Conditions Booklet among others, as contemplated under the RJL Client Account Agreement and the RJL Partners Program Statement of Policy, among others. To avoid use of multiple terms that have the same meaning, except, perhaps, as to the mechanism of application, for the balance of this Decision, I shall refer to this right simply as a right to defence costs.

4 Page: 4 herein, absent further submissions, and at the risk of costs, it only related to defence of the P/RJ Action. [10] The P/RJ Action, now at the Amended Amended Statement of Claim stage further amendments are being sought, provides the claims against Raymond James and Kostic by the Piikani Nation, and the historic and background information that brings this Application before the Court. The P/RJ Action arises subsequent to a Settlement Agreement, dated July 16, 2002, between the Piikani Nation and the Governments of Canada and Alberta, wherein a settlement of certain disputes with respect to the Old Man River was achieved and the payment of approximately $64,000, was paid into a Settlement Agreement to be held by a Trustee, pursuant to the Piikani Trust Agreement, and for which there were three separate Piikani Trust Funds. Under the Piikani Trust Agreement, Piikani Nation appointed CIBC Trust Corporation (CIBC) as the Trustee of the Piikani Trust Funds. Pursuant to the Piikani Trust Agreement, CIBC was required to retain one or more institutional investment counselors named by the Piikani Nation Council. [11] On November 18, 2002, pursuant to the Piikani Trust Agreement, Piikani Nation appointed CIBC Wood Gundy (Wood Gundy) as the Investment Counselor and Kostic as the registered representative of Wood Gundy (an employee since May 2001) to direct and arrange the investment of Piikani Trust Funds for authorized investments. On March 18, 2004, Kostic resigned from Wood Gundy. [12] On November 26, 2004, pursuant to the Piikani Trust Agreement, Piikani Nation named Raymond James Ltd. ( Raymond James ) to be the new investment advisor to replace Wood Gundy. On or about the same day, Raymond James named Kostic (an employee of Raymond James from June 2004) as an investment advisor for this purpose. An Investment Management Agreement between the Piikani Nation and Raymond James was executed for this purpose on or about December 3, [13] There was also a Business Agreement between the Piikani Nation and Kostic dated November 18, 2002, in relation to Wood Gundy, as amended and dated November 22, 2004, as it relates to Raymond James, each as relates to Kostic s role as an Investment Advisor. That/those Business Agreement(s) (reproduced at pp of Tab 10 of the Kostic Brief) also has an indemnity and save harmless provision, but it is not invoked in this Application, nor did CIBC seek contribution from the Piikani Nation, relative to its similar alleged duty to pay defence costs. [14] In the P/RJ Action, the Piikani Nation 7 sued Raymond James and Kostic on the basis that they had breached the terms of the Piikani Trust Agreement in various ways, including (para. 63) participating in an unlawful scheme through the Swift Transfers to defraud Piikani Nation. Breaches of the Management Agreement and Investment Policy were also alleged and causes of action of negligence and breach of fiduciary duty were claimed. Conspiracy was additionally alleged (para. 67), including the allegation that Kostic was a party to and involved in a scheme or conspiracy... to obtain funds from the Trust unlawfully, including the payment of bribes or kickbacks. The Piikani Nation further claimed (para. 68) that Raymond James was directly and/or vicariously liable for the negligence and breach of fiduciary duty of Kostic. As noted, it 7 The Plaintiffs were actually the Piikani Nation and Piikani Investment Corporation, but they are collectively referred to herein under the name Piikani Nation, as nothing arises herein to distinguish between them. Moreover, Piikani Investment Corporation was ultimately struck from the Action.

5 Page: 5 is primarily (and I have held solely in the result) in respect of this P/RJ Action for which payment of defence costs are sought in the Kostic Application. [15] Notwithstanding that Kostic did not have counsel provided by CIBC to this date, she, through counsel appointed by her and/or Raymond James, filed pleadings including an Amended Amended Statement of Defence on July 23, 2007 and a Third Party Notice against CIBC Trust Corporation on February 8, 2007, the latter noting in para. 1 that CIBC was the Trustee, and Piikani Nation was the beneficiary, under the Piikani Trust Agreement. [16] As alluded to above, it is clear to the Court, as a matter of fact, and I find that the P/RJ Action relates in time sequence only to matters after Kostic ceased employment with Wood Gundy 8. Therefore, I shall not refer substantively to Wood Gundy further. [17] Kostic was an employee and agent of Raymond James from June 2004 to February 2007, apparently remaining an employee of Raymond James after she went on medical leave to obtain long-term disability. In the interval, she operated brokerage accounts under the Piikani Trust commencing [18] As it relates to her work through Raymond James, Kostic relies upon Account Agreements, including the New Client Application Form 9, dated November 26, 2004, and the Client Account Agreement of August 16, 2005, between the Piikani Nation and CIBC, as coaccount holders (both contained in Tab 10 to Kostic s Brief). Kostic signed the first (p. 88 of Tab 10) on November 29, 2004, internal to Raymond James, and in her role as Investment Advisor, and the second (p. 99 of Tab 10), as a witness 10. The Client Account Agreement specifically refers to, and incorporates by reference, the Account Terms and Conditions Booklet of Raymond James (Tab 12 to Kostic s Brief), which Kostic claims as the basis for an obligation by CIBC to pay defence costs to Kostic. Kostic specifically addressed the applicability of these agreements in paras of her Reply Brief, the application of which I support. The Booklet, in para. 19 provides that: 19. Indemnity regarding agents and attorneys You [CIBC] will indemnify and hold us [Raymond James] harmless from any and all losses, liabilities, costs and expenses (including legal fees) resulting from us [Raymond James] acting in accordance with any authority granted by you [CIBC] to and agent [Kostic] under a trading authorization [19] Additional Provisions for Joint Accounts in Part II of the Booklet (where, as here, I find, includes a joint accounts by the Nation and CIBC) provides, in para. 22: See discussion at TR 28/5 7. In her Reply Brief, at para. 50, Kostic calls this the master agreement among the parties from which the others flow. The Investment Management Agreement (IMA) between the Nation and CIBC, dated December 3, 2004 (which Kostic signed, on behalf or Raymond James, as approved by Mike Irwin, ostensibly on behalf of Raymond James), references Raymond James continuing the three trust accounts (Piikani Trust Investment, Piikani Trust Heritage, and Piikani Trust Youth and Education), and acknowledges Raymond James receiving instructions from CIBC and Piikani Nation to operate the accounts. See also discussion at TR 18/39 19/18.

6 Page: Indemnification As tenants [Nation and CIBC] you jointly and severally agree to indemnify and hold us [Raymond James and agents, including Kostic] harmless from any and all losses, liabilities, cost and expenses (including legal fees) resulting from our acting in accordance with the authority referred to in section 21 [applicable to joint tenants or tenants-in-common]. [20] Kostic also refers (see paras of the Kostic Reply Brief) to the RJL Partner s Program Statement of Policies (pp of Tab 10 of the Kostic Brief), wherein she alleges that CIBC Trust and the Nation signed as joint account holders. [21] Such a joint account is evident in the New Client Application Form dated November 26, 2004, attached in Tab 10 to the Kostic Brief (see para. 37 of the Kostic Reply Brief). Thereafter, it follows from the record in the P/RJ Action, as I understand it, that joint account transactions were processed. [22] Part IV of the Booklet provides General Provisions for all Accounts, which include the following provisions: 31. Advisor as agent Your advisor [Kostic] may be an employee or an agent of Raymond James. 37. Enurement This agreement is effective for the benefit of, and is binding on us [Raymond James] and you [CIBC]. You [CIBC] confirm our actions under this authorization you will indemnify and save harmless [Raymond James] and our employees and agents [Kostic] from any loss, liabilities, costs and expenses (including legal fees) resulting from our actions under this authorization. [23] The Administrative Details of the Partners Program, between CIBC and Piikani, undated, provided that they would: indemnify and save harmless Raymond James Ltd., its agents from any loss, liability, cost or expense which they may incur. [24] These Account Agreements, upon which a right to defence costs was claimed, between CIBC and Raymond James (collectively the CIBC/Raymond James Agreements ), to which Kostic was clearly not a party 11, but for which she was clearly an agent benefitting from them, is available to her for her benefit. IV. Preliminary Issues [25] As summarized above, there are four preliminary aspects to the Application on which a decision is required. 11 See discussion at TR 20/20 21/33.

7 Page: 7 A. Indemnification [26] The first preliminary issue, in addition to any right to a defence cost, is whether there is an obligation on CIBC to indemnify Kostic for any losses that she might experience if she is liable in the P/RJ Action. CIBC opposed such an obligation in paras , and spoke of the limitation of liability (in paras ), of the CIBC Brief, including any findings in the P/RJ Action other than to act honestly and in good faith and without wilful misconduct or gross negligence 12. However, I do not need to examine those arguments in any detail, in light of my decision herein. This Decision will not address the this matter, as the Court could not possibly make such a decision until all of the allegations have been the subject of a trial and decision in the Piikani/Raymond James Action. Indeed, even if liability against Kostic were found, it is highly likely that any otherwise applicable indemnity would not apply to any negligence 13 residing with her: Canada Steamship v. R., 1952 CarswellNat 192 (PC) at para. 29; Neeley v. MacDonald, 2014 ONCA 874, at para. 7; Shaw GMC Pontiac Buick Hummer Ltd. v. Polaris Explore Ltd., 2009 ABCA 390, at para. 22; and Fenn v. Peterborough (City), 1981 CanLII 66, [1981] 2 S.C.R. 613, at para. 8, although negligence or misconduct must be clearly proved, as do the coverage provided by the indemnity clause; and Falls Creek Falling Contractors Ltd. v. Pat Carson Bulldozing Ltd., 1999 CanLII 5416 (BCSC), at para. 51. [27] As noted, throughout the material and the proceedings, the terms defend and save harmless have been used, but, at least to some extent, they are misleading or not clear. As also noted, I will use the term provide defence costs to include either the provision of defence counsel and/or 14 the costs of defence counsel. While not impacted by statute or by an insurance contract, the nature of the claim with which I will deal is similar in concept to the claims made in insurance situations, including automobile insurance, where someone is alleged to have been liable through negligence and other claims to compensate a plaintiff: see Wi-Lan Inc. v. St. Paul Guarantee Insurance Company, 2005 ABCA 352, at paras. 5, 18 and 29. In insurance, including automobile insurance (although often more impacted by statutory provisions), that involves claims of liability for matters arising between contracting parties. Nevertheless, in general terms, while there are some key differences (see arguments of CIBC at paras. 20 and 21 of the CIBC Brief, and paras of the Kostic Reply brief), the concept is very similar, namely a duty to defend and a duty to provide counsel (which I have combined into a duty to provide defence costs ). In essence, I adopt the words in in para. 29 et seq of the Kostic Reply Brief that the issue is whether there is a legally valid and binding agreement under the terms of which the party obliged itself to provide a defence. B. Claim against Wood Gundy [28] The second preliminary issue is whether there is any real claim by Kostic against Wood Gundy, under the Wood Gundy agreements. Kostic was an employee of Wood Gundy from May 2001 to March In a Third Party Notice filed in the Action on June 20, 2007, Kostic claimed against Wood Gundy, based on her employment with that entity, as a financial advisor, prior to June 9, However, the Court is not satisfied, on this record, that there is any relevance for this claim based upon the P/RJ Action against Wood Gundy, even if there were an See discussion at TR 75/6-8 TR 4/ However, see discussion on the difference between gross negligence, allegedly not relied upon by the Piikani Nation, and negligence: TR 15/13 17/2, matters on which I leave for the Trial Justice. It might be some combination of both at different times past and in the future.

8 Page: 8 active indemnity or defence costs provision, which CIBC argued (CIBC Brief, paras ) does not exist. Even if there were, or is, an active indemnity or defence costs provision, there is simply no evidence on the record before me to link any liability of Kostic to the Piikani Nation to the time she was employed by Wood Gundy. Thus, I do not need to consider CIBC s further arguments (CIBC Brief, paras ). [29] In the end result, the only matter under consideration by the Court in this Decision is with respect to a right to defence costs under contracts while Ms. Kostic was an investment advisor through Raymond James. [30] Whatever the Court s decision herein, applicable now or in the future, with respect to the right to defence costs, it may well be that, if there is ultimately proof of any allegation of fraud by Ms. Kostic vis-à-vis Piikani Nation or CIBC, any such prima facie right to defence costs, otherwise appropriate, would not be and could not be enforced, and if funds are advanced based on any such decision, they may well be the subject of application for recovery. I do not state this as a matter of law and final conclusion but rather as a matter of potential further issue/risk that may flow depending on the substantive decision in the P/RJ action. C. Actions other than the P/RJ Action? [31] The third preliminary issue relates to whether, if CIBC has a liability to provide defence costs to Kostic, it applies to any actions in which Kostic has involved herself other than the P/RJ Action? In the Application, Kostic claims entitlement to defence costs in respect of about 30 other Piikani related actions before the Court, of which Kostic is a party to only four of them (Kostic Reply Brief, paras. 5 and 6), and, I believe, a defendant in only the P/RJ Action 15. Nevertheless, Kostic argued (Kostic Reply Brief, paras. 6-13) that orders in these other actions nonetheless have created obligations and liability for her. While she, or others, interjecting her into these other actions, none alleged substantive liability against Kostic, to my understanding, and obligations only arose from the act of intervention (and to that extent, there may be an affect on her procedural rights, as I stated at the beginning of oral argument TR 4/8-14), and none, I find, relate to defence of the P/RJ Action or under the CIBC/Raymond James Agreements. To the extent that that Kostic has any right to defence costs, I agree with CIBC (CIBC Brief, paras ), and find that any such right only applies to those actions for which Ms. Kostic was, directly, a defendant and potential liable to direct relief (that does not include cost liability for actions that Kostic took on her own TR 4/16-20), and not to defence costs any actions or steps that she took as a plaintiff or claimant, or as an interested party, in any other Piikani related actions. In other words, in a symbolic way, she is only entitled to defence costs, if at all, as a shield, but not to advance a claim as a sword. In the result, on the record before me in this Application, this Decision applies only to the P/RH Action, and no other action. If issues remain to be decided on any such other action, or AC or AC, arising from the P/RH Action (see CIBC Brief, para. 62), an application can be made (with leave as required) to determine whether this Decision, or its reasoning, should apply. In the meantime, on this record, I find that it does not. 15 See para. 11 of the CIBC Brief which gives reference to the transcript to the cross-examination of Kostic, which purports to provide the answer as to the number in which she is a defendant, but that transcript is not readily available to the Court. This I rely on my case management memory.

9 Page: 9 D. Relevance, if any, of the Web Use Agreement [32] Fourth, I find that the Web Use Agreement has no material relevance in this Application, because there is no evidence or even serious suggestion, nor can I even any meaningful allegation, that any liability results from the use of the Raymond James web site, or through the application of the Web Use Agreement. Indeed, CIBC argued (paras. 25 and 26 of the CIBC Brief) that there is no evidence that CIBC signed such an agreement. However, Kostic countered (Kostic Reply Brief, paras and 162) that clause 40 of the RJL Terms and Conditions Booklet, incorporated by reference into the RJL Client Account Agreement, made CIBC automatically a party to the Web Use Agreement, and that there was ample CIBC use. But, even if CIBC was bound by the Web Use Agreement, and the website was used (see Kostic s Reply Brief, paras. 44 and 95-97), absent allegations of some impropriety regarding its use 16, that does not engage the Web Use Agreement s defence costs provisions 17. Nevertheless, while not directly applicable, much of the right to defence costs provisions (inter alia, sections 13 and 23 of the Web Use Agreement) are similar to other such provisions in the agreements related to CIBC obligations to Raymond James and its agents (argued, not convincingly, by Kostic to be generally relevant in the sense of the series of agreements between the parties, and, unnecessarily as to the contemplation of an intent to confer rights regarding defence costs, clear without it TR 49/36 7). With this finding (anticipated by CIBC TR 86/16 21), I do not need to get into the distinction between using the Web Use Agreement and or other electronic messaging (TR 83/9 86/2). E. Conclusion on Preliminary Issues [33] Thus, the Court will not make any further rulings herein on these four preliminary issues, but only on the issue of a right to defence costs in the P/RJ Action related to the Piikani/Raymond James agreements. V. Issues for Determination [34] In the result, the substantive issues for determination (CIBC addressed their list of argued issues in para. 14 of the CIBC Brief, some of which I have already disposed) that I find (and there are some issues within each) include the following: A. Is there privity of contract between Kostic and CIBC? If no privity, is Kostic entitled to the benefits of contracts between CIBC and Raymond James? B. Is there a right to defence costs apparent on the basis of agreements, without more? C. Is there a right to defence costs based on the agreements in the circumstances of this case? The indemnity provisions ( p. 174 of Tab 12 of the Kostic Brief see discussions about this at, inter alia, TR 29/35 31/13) relate to losses incurred by us [Raymond James, and it agents] in connection with any claim or demand arising out of, related to, or connected with your [CIBC s] access to or use of the Web site. There is no such claim in the proceedings of any loss resulting from any such use. TR 9/33 39, TR 10/12, and TR 12/14-26.

10 Page: 10 V. Analysis A. Privity of Contract and Principled Exceptions Thereto [35] Signalling my decision, I find that, in spite of arguments by Kostic to the contrary (para. 110 et seq of the Kostic Brief), Kostic has no privity of contract with CIBC with respect to a right to defence costs. Nevertheless, I find that, as Kostic was an agent of Raymond James, she is the beneficiary of the defence cost provision of the agreements between CIBC and Raymond James. [36] Kostic is not a party to the CIBC/Raymond James Agreements, notwithstanding that she signed, at various times, as an employee, or Investment Agent, of Raymond James or as a witness. An official of Raymond James signed in each case on behalf of Raymond James and, at best, any signature of Kostic was on behalf of (i.e. agent for) Raymond James, or as a witness, not as a party in her own right. [37] However, while, under the law of privity, a non-party to a contract has no legal right to enforce the contract s provisions: Dunlop Pneumatic Tyre Co. v Selfridge and Co., [1915] A.C.847, at 853, there may be, and, I find, there is here, a principled exception to privity. [38] First, the principled exception to privity applies here such that the CIBC/Raymond James Agreements were available to Kostic as an employee of Raymond James: London Drugs Ltd. V. Kuehne & Nagel International Ltd. [1993] 3 SCR 299, at 302; Fraser River Pile and Dredge Ltd v Can-Dive Services Ltd, [1999] 3 SCR 108, at paras. 28 and 32 (contrary to the submissions of CIBC at TR 89/22 92/3); and Brown v. Bellville (City), 2013 ONCA 148, at paras. 80, and Reference to the principles in Bhasin v. Hrynew, [2014] 3 SCR 494, 2014 SCC 71, at para. 44, and Orange Julius Can. V. Surrey (City)(Laing Props v. All Seasons Display), 2000 BCCA 467, at paras , are not necessary in a case such as this where the inclusion of agents and employees is clearly stated, and obviously intended. Moreover, no reliance need be placed on Banque Nationale de Paris (Canada) v. Canadian Imperial Bank of Commerce, 2001 CanLII (O.N.C.A.), at para. 28, which deals with more nuanced cases if sufficient degree of connection, less specific than the agreements at Bar. [39] Based on principles in the cases relied upon above, I find, contrary to the suggestion of CIBC at para. 31 of the CIBC Brief, that it is clear from the contract documents that CIBC and Raymond James intended to extend the benefits sought, in this case, to defend third party employees of Raymond James, including Kostic, as a senior Financial Advisor to, and employee of, Raymond James (see also para. 84 of the Kostic Reply Brief, wherein it is stated, and I agree, that [the] agreements... included in Clause expressly identified her ). Moreover, referencing Fraser, at para. 32, I find that the activities of Kostic as a financial advisor and agent of Raymond James are, prima facie, the very activities contemplated as coming within the scope of the contract any findings to the contrary, at the trial, would only be relevant to a claim for reimbursement of any paid defence costs. I find CIBC s arguments based on contractual interpretation (CIBC s Brief, para. 35) weak. Moreover, the fact that the right to defence costs is specifically restricted only to section of 13 of the, otherwise inapplicable, Web Use Agreement (CIBC Brief, paras ), does not mean that, absent a similar specifically restrictive provision in other agreements, a restriction is inferred in those other agreements indeed, it is the opposite.

11 Page: 11 [40] I do not accept the arguments of CIBC (CIBC Brief, paras ) that, in respect of para. 19 of the Terms and Conditions, that there were no trading authorizations given. Although they may not have been in the specific forms as contemplated, I find that there were authorizations given, in the manner explained at paras of the Kostic Reply Brief. [41] Moreover, as to para. 22 of the Terms and Conditions, referencing para. 21, and in particular the phrase... you authorize and request us to open a joint account at Raymond James in both your names [Nation, as beneficiary and CIBC, as Trustee], the evidence indicates that there was such a joint account(s) with which the Nation and CIBC could deal, including make, and presumably change, investments, Kostic being an agent of Raymond James, on behalf of either the Nation or CIBC for this purpose. This is notwithstanding that there may have been less than perfect compliance, by others than Kostic, with information required (CIBC Brief, paras and 49; TR 65/24 67/21). Nevertheless, some of the information required in the forms to support accounts being joint or as tenants in common is not applicable to the parties here, who are not individuals, but corporate entities see Kostic Reply Brief, at paras In the result, I agree with the arguments of Kostic (Kostic Reply Brief, paras ), that it is the substance of the relationship, not the form that is important, and the substance does confirm the authorization and establishment of joint accounts. The same conclusion results from Kostic s response (Kostic Reply Brief, paras see also paras ) to CIBC s arguments that CIBC and the Piikani Nation did not signify a form of joint tenancy or sign in the capacity of co-applicants. It is for the trial of the P/RJ action to determine whether CIBC arguments (TR 54/23 61/30) are correct that the establishment of joint accounts would frustrate the purpose of the... Trust Agreement 18, compared to the submissions to the contrary of Kostic in her Reply Brief, at para For my purposes, whether the provision of joint accounts would frustrate or be antithetical to the Trust Agreement, is immaterial, in that I find such accounts were, in fact, established and result in a liability for CIBC to provide defence costs. [42] Finally, as to para. 37 of the Terms and Conditions, while the first part of the clause refers to individuals (corporeal bodies), not corporations, the last sentence is not so restricted and properly applies to the account holders, the Nation or CIBC, even though corporate, not individual or corporeal. Thus, I find that the Enurement clause in para. 37 applies in either case such that: You [the Nation and/or CIBC] confirm our [Raymond James, through its agent, Kostic] actions under this authorization including all purchases, sales and redemptions of securities, and you [CIBC] will indemnify and save harmless us [Raymond James] and our... employees and agents [Kostic] from any... costs and expenses (including legal fees) resulting from our [Raymond James, and its agent, Kostic] actions under this authorization. [43] Second, while any potential indemnity from liability may be negative, after determination at trial (as Kostic acknowledges at paras. 109, 166 and of her Reply 18 At TR 60/27 30, the CIBC argued that joint accounts, with a right of the Nation to invest would be antithetical to the ostensible authority that... suggests was given to the Nation under this joint account provision. That s certainly relevant to the Court in determining whether that authority was ever given contrary to the expressed terms of the trustee agreement. See also the CICB arguments at TR 92/16 93/21.

12 Page: 12 Brief), and subject, as noted above, to the possible defence costs recovery depending on the findings, it would follow that, prima facie, a party, such as Kostic, for whom the CIBC/Raymond James Agreements were in place, would be entitled to defence costs. In this case that s the activities as a financial advisor [Kostic] providing investment services to the Trustee under the Piikani Trust Agreement, CIBC, at the request of Piikani Nation. B. The Terms of CIBC/Raymond James Agreements and Facts Providing for Defence Costs [44] I find that I can combine to the two separated issues of whether right to defence costs arises from the agreements alone, or is dependent on the facts under which the agreements operated. [45] I find that the terms of the CIBC/Raymond James Agreements do not provide defence costs on their own, but only apply to Kostic to the extent that they are supported by the facts under which they operated. The facts relate to provisions in the Agreements, including Sections 37 and 47 of the Terms and Conditions Booklet. Without a detailed analysis of all the activities by Kostic under the Agreements, the evidence of which is spread across the record in the P/RJ Action, but little detail in this Application, and when provided it is not always consistent. In the result, I do not have a full record, but, from the record that I do have, I find that the facts, relating to the actions of Kostic, on behalf of and as agent of Raymond James, in conjunction with the Nation, support preliminary to the trial in the P/RJ Action, the right to defence costs. For more detailed facts, and findings of credibility where they differ, resort can only be made to the record of the trial of the P/RJ Action. [46] Kostic raises the issue of pleadings at paras of the Kostic Brief, under the heading of Why a self-standing application?, relying on the case of Alberta Mortgage and Housing Corp. v. Delisle Holdings Ltd., 1999 ABQB 721 (Lee, J.), but I find no reason not to give effect to the results of this Decision by reason of this self-standing Application, rather than through the Third Party Notice provisions in the P/RJ Action (where Kostic did not directly raise the issue and would otherwise need to amend the Notice, except that, as I noted at the beginning, Kostic sought such relief against CIBC/Wood Gundy by a Third Party Claim filed by Kostic on June 20, 2007, and by her Reply to Defence by CIBC of Third Party Defendant, filed February 5, In the result, I am satisfied that the issue has been sufficiently pleaded and known to CIBC that there is no reason to require any further pleadings on this issue. [47] Equally so, I do not find that any argument on limitations (addressed by Kostic at paras ) has merit. VI. Conclusion [48] I find that CIBC is liable to provide defence costs to Kostic in defending the P/RJ Action (and possibly other actions, but only upon further application) under the terms of the various applicable agreements between CIBC and Raymond James, not as a party to such agreements, but as an employee of and agent (financial adviser) to Raymond James, who is, under the agreements, a beneficiary of such right. [49] The rights I have found are clearly prospective. They may also be indeed, absent further considerations, should be - retroactive, although that was not addressed specifically in the Application or at the hearing. To the extent that past representation and/or defence costs to

13 Page: 13 Kostic has/have not been provided by CIBC, but counsel were retained by Kostic directly or in some other manner unknown to the Court, any such defence costs to be paid by CIBC must relate only to the defence of the P/RJ Action, not other collateral issues. The Court is prepared to hear disputes as to the entitlement of any type (but not the amount, which would be for the Assessment Officer under the Rules of Court) of defence costs 19, or other such issues beyond the jurisdiction of the Assessment Officer. [50] Costs of this Application follow to Kostic, as may be agreed or determined by the Assessment Officer. Heard on the 22nd day of November Dated at the City of Calgary, Alberta this 6 th day of December J.D. Rooke A.C.J.C.Q.B.A. Appearances: Gabor Zinner for the Applicant David Tupper and Kate Andrews for the Respondent 19 One issue raised by CIBC in oral argument (TR 69/1 70/39) related to solicitor-client costs, and referenced the decisions of Stewart Title and Alberta Ltd. V. Elephant Enterprises Inc., 2014 ABCA 437, at paras. 5 and 10, the law being clear that there is a need of a clear and express intention and whether that exists in fact. I apply the normal understanding that it does.