Silva v. Royal Bank of Canada: A cautionary tale about terminating for cause

David Grout - Articling Student
Affleck Greene McMurtry LLP

September 8th, 2026

The Ontario Superior Court of Justice in Silva v. Royal Bank of Canada, 2026 ONSC 3841 should be a siren call for all financial institutions who purport to fire an employee for cause. After filing a Notice of Termination on the National Registration Database (NRD) that incorrectly asserted cause for the plaintiff’s termination, RBC was found liable for wrongful dismissal and ordered to pay over $2.5 million in damages to the terminated employee, including $250,000 in punitive damages.

Background:

Ravini Silva was a financial planner employed by RBC working under the banner of RBC’s mutual fund dealer, Royal Mutual Funds Inc. (“RMCI”).

Prior to her dismissal, Silva had been a high achiever. She had developed a strong book of business worth over $150 million and had a loyal customer base. The breakdown in relations between her and RBC management started when RBC sought to relocate her from Richmond Hill to Ajax but asked she leave behind her clients to be serviced by another financial planner. Silva was given 12-18 months to inform clients and transition them to a new planner, but bank management took over when a client complained after hearing of the transition from Silva. Bank management immediately transferred over 65 clients to a new financial planner, sometimes without notice to the clients.

Over time, evidence demonstrated that bank management became increasingly dissatisfied with Silva’s conduct. This led to several bank investigations and four consecutive quarterly reviews where Silva was given a rating of “Does Not Meet” expectations. These were the first negative performance reviews she had ever received in a decade with the bank and they led to a 10% decrease in her variable compensation. Silva reported feeling bullied and complained of retaliation. The investigator then shared this complaint with the manager whom Silva accused of retaliatory behaviour.

Eventually, in April 2018 the bank purported to terminate Silva for cause, claiming she sent confidential client information to her personal email, processed transactions before obtaining client signatures, and backdated client signatures on trade documents. In contrast, the MFDA conducted a parallel investigation, labelled Silva’s breaches as minor in nature and took no action beyond a cautionary letter.

RBC asserted these actions were in breach of its Code of Conduct, operating procedures, and the by-laws, rules, and policies of RMCI’s regulator, the Mutual Fund Dealers Association of Canada (“MFDA”). RBC then published a Notice of Termination (“NOT”) on the NRD indicating that Silva had been dismissed for cause and included in the NOT an allegation that she had been investigated for possible material violations of fiduciary duty, regulatory requirements, and compliance procedures. It is well-known in the investment industry that such allegations in a NOT can be, and usually are, fatal to an advisor’s career, as no financial services firm will typically want to hire someone under such a serious cloud of misconduct allegations.

The Court’s Decision

Silva sued RBC for damages related to her wrongful dismissal and loss of earning capacity, as well as for aggravated and punitive damages, and she sought an order requiring her NOT to be corrected to remove the allegation of dismissal for cause.

After a lengthy trial, the court sided with Silva, awarding:

$313,333 for 16 months’ pay in lieu of reasonable notice plus pre-judgement interest;
$1,919,272 for loss of earning capacity, including pre-judgement interest;
$150,000 in aggravated damages;
$250,000 in punitive damages; and
An order that RBC correct Silva’s NOT.

The trial judge noted that the bank’s reasons for dismissal appeared to be a moving target. The confidential client information Silva forwarded to her personal email was deleted immediately, was necessary for her job, or had been transferred in error. The bank failed to prove its allegations about unauthorized withdrawal transactions or that they were not authorized by the clients via email or phone. Backdating documents was found to be a practice that was accepted, if not condoned, by the bank. While Silva technically breached RBC’s Code of Conduct by sending the emails, this did not meet the standard to justify dismissal for cause. The Court thereby found cause was not proven in this case.

The trial judge expressed extreme displeasure with the bank’s conduct. She found that Silva was targeted by the bank, the bank’s investigations were inadequate, and RBC was searching for a reason to end Silva’s employment. While the trial judge did not make a conclusive finding as to why the bank sought out or manufactured violations as excuses to terminate Silva, she indicated that preserving Silva’s $150 million book of business with the bank was a plausible inference.

In deciding on the quantum of damages, the Court found Silva was entitled to salary for 16 months of notice ($313,333). Further the Court found that Silva had suffered mental distress, depression, and anxiety directly connected to RBC’s dismissal warranting aggravated damages of $150,000. Further, the mentions of Silva’s “egregious conduct” and “repeated failure to follow compliance policies and procedures” in the NOT effectively ended Silva’s ability to secure a job in the investment field despite her “superhuman” effort. This warranted $1,919,272 for a loss of earning capacity. In its entirety, RBC’s conduct was found to be harsh, reprehensible, and dishonest – warranting punitive damages of $250,000 in order to deter such callous treatment of employees by other employers.

The Applicability of the Decision

Silva reflects realities of the investment industry. Allegations of cause for termination in NOTs are not uncommon and, where there has been misconduct, there is an obligation to disclose it. However, the consequences of misrepresentations in NOTs can be very harsh for those terminated in the financial services industry.

In this case, the penalties were especially severe. However, this outcome results from motives the Court referred to as “vindictive” in ambushing Ms. Silva. It is also a consequence of powerful testimonial evidence. Silva had three separate prospective employers testify on her behalf that if not for the NOT, they would have employed her.

While the specific facts and the Court’s resulting discontent may have harshened the resulting judgment, Silva acts as a warning for employers reporting a registrant’s termination to ensure the accuracy of a NOT and to refrain from using an NOT for vindictive or improper purposes.