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TD Asset Management wins all issues in common issues trial alleging closet indexing

Date Closed

June 28, 2022

Lead Office



1.30 Billion CAD

McCarthy Tétrault successfully defended TD Asset Management Inc (“TDAM”) in a class action common issues trial. On June 28, 2022, the BC Supreme Court ruled in favour of TDAM on all certified common issues, dismissing the class’ claim for over C$1.3 billion in damages.

The case, Turpin v. TD Asset Management, 2022 BCSC 1083, centred around the TD Canadian Equity Fund (“CEF”), one of Canada’s largest mutual funds with over C$5 billion in assets under management. The class’ central theory was that the portfolio manager of the Fund was not making active investment decisions and was instead simply attempting to track or replicate the Fund’s benchmark index (known as “closet indexing”). The Court rejected the class’ claims, finding that throughout the class period the Fund was actively managed with the objective of outperforming the benchmark index. 

The case is the first class action trial decision involving an investment fund manager and the first to consider on the merits how the law of trust applies to mutual fund investment trusts. It is a very rare example of a certified class action in common law Canada proceeding to a full trial of common issues. 

McCarthy Tétrault LLP represented TD Asset management Inc. with a team co-led by Jill Yates and Shane D’Souza, and supported by Kevan Hanowski, Jenn Choi, Heather Mallabone, Victoria Tortora, Joannie Fu, and Sean Sadler.