Case Name:

Authorson Estate v. Canada (Attorney General)

Between

Joseph Patrick Authorson, deceased, by his Litigation

Administrator, Peter Mountney and by his Litigation

Guardian, Lenore Majoros, plaintiff, and

The Attorney General of Canada, defendant

[2005] O.J. No. 5582

[2005] O.T.C. 1126

49 C.C.P.B. 195

144 A.C.W.S. (3d) 883

2005 CarswellOnt 7462

Court File No. 99-GD-45963

Ontario Superior Court of Justice

J.H. Brockenshire J.

Heard: August 25 and 26, 2005.

Judgment: December 29, 2005.

(62 paras.)

Civil evidence -- Methods of proof -- Judicial notice -- Particular subject matter -- It was determined that the court could take judicial notice of a general acceptance in the financial community of the ability of portfolio managers to shift, within limits, the asset allocations in a portfolio.

Counsel:

Raymond G. Colautti, David G. Greenaway, Peter Sengbusch, for the Plaintiff

John Spencer, William Knights, Roslyn Mounsey, Sheila Hepworth, for the Attorney General

TRIAL OF AN ISSUE - JUDICIAL NOTICE

REASONS FOR DECISION

J.H. BROCKENSHIRE J.:--

INTRODUCTORY MATTERS

1 In my decision released December 31st, 2004, in the Summary Judgment Motion for damages in this case, I had found that the Crown acted as a trustee for the Veterans' Funds, without any statutory parameters on what it should or could do in that role. I found in paragraph 146, that the Government should have invested the funds in a mixed portfolio of 60 per cent bonds, 35 per cent equity, and 5 per cent cash.

2 I further provided, to give flexibility to respond to changing conditions in the market, and in order to maximize the annual returns, for changes of 10 per cent either way in both the bond portfolio and the equity portfolio, so that the percentage of bonds could vary from 70 per cent to 50 per cent, and the percentage of equities could very from 25 per cent to 45 per cent. I also allowed a 15 per cent variance, on the upside only, in the cash portion, so it could go up to 20 per cent but not below 5 per cent.

3 In paragraph 147 of that decision I said, "This approach of providing a basic asset allocation mix, but with provision for variance from the norms within fixed limits, is so common in the mutual fund industry, and in other financial fields, and so well publicized, that I take judicial notice of it." At the end of that decision I adjourned the assessment of damages for Professor Charette to calculate the resulting amount if the Veterans' Funds had been invested as I had found they should have been, with the assessment to be completed after the Crown had input to those figures.

4 The matter continued before me on May 24th, 2005, at which time the crown raised an objection to my taking judicial notice of what I had referred to as a common approach of providing a basic asset allocation mix, but with provision for variance from the norms within fixed limits.

5 The issue was obviously important, because Professor Charette in his calculations had indicated that without the ability to vary the portfolio from the norms, the resulting damage figure would be some 2 billion dollars less. Counsel on both sides put forth arguments, based on information in the existing reports of various experts, but I concluded that the interests of justice would best be served by a formal trial of this issue, which I defined in a letter to counsel of May 31st, 2005 as whether the court "could take Judicial Notice of a general acceptance in the financial community of the ability of portfolio managers to shift, within limits, the asset allocations in the portfolio."

6 A trial, on viva voce, evidence was schedule for August 25 and 26, 2005.

7 Class and Crown counsel were agreed that a general description of "judicial notice" is the "acceptance, without the requirement of proof, of the truth of a particular fact or state of affairs." The authorities say that: "Facts which are (a) so notorious as not to be the subject of dispute among reasonable persons, or (b) capable of immediate and accurate demonstration by resorting to readily accessible sources of indisputable accuracy, may be noticed by the court without proof of them by any party." See R. v. Williams, [1998] 1 S.C.R. 1128

8 Further, class counsel referred to R. v. Potts, (1982) 36 O.R. (2d) 195 at page 203, C.A., where Thorson, J.A. of the Ontario Court of Appeal referred to courts taking judicial notice of some matter of common knowledge "in the community or in a particular class of the community." Class counsel referred to an article by G.D. Nokes: "The Limits of Judicial Notice." (1058) L.Q.R. 59, pp. 66-67, where he says, "... a fact may be common knowledge only among a class of the community, such as those interested in a particular sport ..."

CLASS WITNESSES:

HUSSEIN AMAD

9 Class counsel called Mr. Hussein Amad, who holds a Bachelor of Commerce from McGill University, 1990, is a Certified General Accountant and also a Certified Financial Analyst. He has been working for the Bank of Nova Scotia for the past 15 years, and for the last five as one of the 13 officers in the discretionary fund management branch of the bank, which manages some 21 billion dollars worth of assets. He also teaches at the University of Toronto in the areas of risk financing and risk management. He also does seminars across Canada for the Canadian Securities Institute. His work and his teaching was intimately connected to the subject of asset mixes and he was accepted as an expert in that area.

10 He explained that strategic asset allocation, in his view, dealt with the longer term objectives of a portfolio, while technical asset allocation involves market timing and bigger and much quicker moves, trying to beat the market. He felt that over a long time that did not work, but that strategic asset allocation, involving slow moves as information becomes available, added value to a portfolio.

11 He described a portfolio of 60 per cent bonds, 35 per cent equity and five per cent cash as conservative. He described a ten per cent limit on varying a mix for equity and bonds as also conservative and said that in his experience the limitation on variances could be ten to 30 per cent.

12 Under cross-examination by crown counsel, he agreed that a portfolio could go outside the limits of a basic allocation simply because, for example, equities went up in value while bonds declined, but a lot of prospectuses for investment portfolios are written broadly to allow for this and give time to rebalance. He also said that instant buying and selling to get back to an optimum portfolio is counterproductive because of the transaction costs.

13 Mr. Amad said that fund managers are paid to forecast economic and financial conditions, and while tactical asset allocations carry risks, if the manager firmly believes the move is right that is what he is paid to do. He referred to a will-say statement by Professor Kirzner that said that if a fund manager/investor changes the strategic asset allocation on a periodic basis based on his view of changing economic/financial outlook, the approach is called tactical asset allocation. Mr. Amad said that Professor Kirzner was wrong, as all managers are paid to forecast economic and financial conditions and any asset manager would take exception to that statement.

MICHAEL BARRASSO

14 Michael Barrasso provided earlier affidavits in these proceedings as to the investment practices and policies of Royal Trust Corporation and R.B.C. Investments. Mr. Barrasso's experience has been as an investment assistant and investment officer with Canada Trust and National Trust and account manager and senior portfolio manager with R.B.C. Financial Group - R.B.C. Global Investment Management until 2003. Presently he is vice-president and investment counselor in the trust investment group of R.B.C. Investments Trust Services. He was accepted as an expert in the management of trust portfolios.

15 Mr. Barrasso referred to the trust portfolio management policy and guidelines of Royal Trust (Exhibit Number Three), which he said collects the policies of R.B.C. over the years and is amended from time to time. He referred particularly to paragraph 3.6 on page 13, dealing with portfolio structure, and he noted that the investment policy statement for each portfolio has to clearly state the minimum/maximum range for exposure to each mandate measured at current market value as a percentage of the total portfolio.

16 In his view, the portfolio of 60 per cent bonds, 35 per cent equity and five per cent cash was close to what he had indicated was the standard, and he said that he would feel quite comfortable with the ten per cent allowed swings in equities and bonds. He said that ranges are needed in order to meet the needs of beneficiaries and to react to unexpected changes and needs and also to react to major market changes.

17 He was referred to a document brief, marked as Exhibit Number Four, which contains, at 26 tabs, a variety of documents from R.B.C. and/or Royal Trust relating in some way to portfolio investments.

18 Paragraph T18 is particularly illuminating as it shows the summer of 2005 recommended asset mixes, showing not only a current recommended mix but the ranges in the past and specific recommendations for four previous quarters, and also showing regional allocations for portfolio components.

19 Mr. Barrasso's evidence, after reviewing a number of tabs in this book and speaking from his general experience, was that having a leeway, or permissible swings of plus or minus ten per cent in a mixed portfolio is quite acceptable.

20 Mr. Barrasso was referred to Exhibit Number Six, a thick volume containing investment statements from five huge pension plans and the information to investors of a great number of individual mutual funds from three large mutual fund companies. All of the pension plans, including in my view rather tellingly, the Canada Pension Plan and the Canada Public Sector Pension Plan, benchmark asset allocations, right in the middle of a range. The majority of the plans, including the Canada Pension Plan, limit the swing to ten per cent in each direction. The Public Sector Pension Plan is a little tighter, but still permits a range of 15 to 30 per cent for bonds and from 53 to 70 per cent for equities.

21 Among the mutual funds, the ranges were described in various ways. For instance at page 36 of T6, the Templeton Grown Fund, puts it that "a normal market condition is not less than 75 per cent of its invested assets ... are invested in equity securities." At page 182 in T6, the Templeton Diversified Income Fund speaks of "under normal market conditions, an optimal asset mix of Canadian income 70-80 per cent and global income 20-30 per cent." At page 190, the Templeton Balance Growth portfolio speaks of "an optimal asset mix of income 35-45 per cent, Canadian equities 30-40 per cent, U.S. equities 9-19 per cent, and global/international equities 8-18 per cent."

22 At T7, a collection of fund information from the Investors Group, page 34 is perhaps the broadest description of all, and in relation to what normally would be regarded as a conservative investment - the Investors Canadian Balanced Fund - where it says that "the advisor will vary the fund's asset mix in order to maintain a mix of equities, debt, and cash that represents its view of the most optimal combination of these investments ..."

23 At T8, page 23, the A.G.F. Canadian Balanced Fund provides that: "Weightings can vary from 20 per cent to 80 per cent in bonds or stocks." At page 27, the fund known as the I.G.F.I. Canadian Allocation Fund states: "its asset allocations will generally fall within the following ranges: 20-90 per cent equity securities, 10-60 per cent fixed income securities, and 0-70 per cent money market instruments."

24 Mr. Barrasso confirmed that all of the materials in Exhibit Number Six are publicly available information and he expressed the view that a stated asset mix, with provisos for variance, is common in the mutual fund industry and other investment fields. Particularly, he noted it is common in the investment of pension funds.

25 In cross-examination, Mr. Barrasso agreed that the Investors Canadian Balanced Fund, T7 page 34, where there were no limits at all permitted a manager to react to changing conditions but also agreed that none of his portfolios had that kind of unlimited mandate. He also agreed that the Templeton Fund at T6, page 190, is a "fund of funds." He also agreed that many funds do not have policies as liberal as the ones quoted and referred to by Class Counsel.

26 Further, he agreed that the O.M.E.R.S. Pension Plan limits swings on fixed income to five per cent each way, as it does with Canadian Equities. He agreed that "rebalancing" means getting back to the benchmark situation for a fund and that the benchmark is the long term goal of the fund. In his view, the purpose of ranges is to keep the management within the range for consistency and for controlling risk. However, he said even with ranges it is possible to go outside of them, and that a manger would then try to get right back within the range. He agreed that following a strategic portfolio mix with disciplined rebalancing is the normal position and the long term objective of R.B.C. and agreed that on page 25 of Exhibit Number Three the minimum/maximum range in an asset class is plus or minus five per cent. He also agreed that was five per cent of the portfolio, not the class. Strategic asset allocation, he said, being done to try to maximize profits, generally proved to be a bad thing. He also agreed that in dealing with trusts, wills and trust agreements there are different considerations than in dealing with an individual investor because of concern for capital and income beneficiaries.

27 The cross-examination did not directly attack Mr. Barrasso's evidence that swings or ranges are common in portfolio asset allocations, and they are widely known and publicized.

28 Mr. Barrasso, in discussing the portfolio management policy and guidelines for Royal Trust alluded to the fundamental importance of the Investment Policy Statement (I.P.S.) as providing the fundamental rules for the investment portfolio and noted that in paragraph 2.3 of the Policy Statement it notes the I.P.S. is to be reviewed at least annually, or more frequently if material changes in the trust circumstances have occurred.

CROWN WITNESSES:

PETER CHARLES KLEIN

29 This expert is currently a professor in the Faculty of Business Administration at Simon Fraser University. Before his academic career, he was with C.I.B.C./Wood Gundy Inc where he was involved with investments of up to two billion at the vice-presidential level. He holds a Bachelor's Degree in Computer Science, a combined LL.B. and M.B.A., and a Ph.D. in Finance. He holds designations as a Chartered General Accountant, Chartered Financial Analyst, and a Chartered Business Valuator. He was accepted as an expert in areas of portfolio swings and general public knowledge thereof.

30 In his evidence in-chief, he stressed the importance of the Investment Policy Statement as defining portfolio purposes, risk tolerances, asset mix, and range if any for variations. There were a number of purposes for allowing variances in the asset mix of a portfolio, firstly to allow for variations in the rate of growth of various asset classes so as to avoid the transaction costs of perpetual rebalancing, and variation ranges could be used to accommodate changes in clients' needs. That would typically be done by changing the I.P.S. unless the changes were very short term. In his view, using permitted variances to try to anticipate market changes is not typically done in practice because it generally is not too successful. In his view, it is better for a manager to be responding to long term changes in the economy.

31 He was asked if it was appropriate for the manager to try to maximize returns annually. He indicated there were two reasons not to try to do that. First, because of the resulting tax implications for individuals and secondly, the transaction costs would outweigh the percentage gain that might be made. In his view, the manager should be looking to a couple of years to be making changes in asset allocations. Changing individual investments within a set class, such as moving from energy to banks, might be a different story. He felt that a manager acting in a fiduciary capacity should have a bias towards acting conservatively, and that market timing strategies would not be appropriate. He also noted that if a manager made an asset shift to the maximum permitted, an inevitable result would be, if the manager was right, that the next day the manager would be in breach of his mandate because the chosen asset would continue to rise in value.

32 In cross-examination, Mr. Klein agreed that to invest the Veterans' money, the Crown would have to do a basic asset allocation in which there should have been a proviso for variances for a number of purposes.

ROBIN POND

33 Robin Pond is a Chartered Financial Analyst and a Certified Management Accountant. He holds a B.A., M.A. and M.B.A. in Finance, has been in the financial services industry for over 25 years, 20 of it with pension funds and the last five years with Morneau Sobeco, an actuarial firm which handles all aspects of pension benefits for pension funds, universities, and the government of Bermuda. Part of their service is giving investment advice to their clients. He was accepted as an expert in investment portfolios, variances therein, and knowledge thereof.

34 In his view, strategic asset allocation is typically a three year policy and based on long range forecasts. Technical allocation involves a shorter time frame.

35 He felt that ranges are allowable in portfolio design, primarily as a risk control measure. He said that a manager can never be on target all of the time and managers like a range, preferably the larger the better, so that they do not find themselves outside of their mandate with their jobs at risk. However, he said that in the industry there is not a lot of active asset shifting or trying to anticipate markets. He said most of the shifts in asset balances result from market drifts. He pointed to studies showing that on average managers cannot beat the market but agreed some can at least for a while. He pointed to a study he carried out of the top funds for two periods in which of the top six in the first period, none were in the top half in the second period.

36 He expressed the view that you would not expect the portfolio manager to purposely swing the asset mix every year but instead he said the manager would tend to stay close to the portfolio policy. He felt a ten per cent swing from that policy would be extreme because it would increase the risk to the client and the risk to the investment manager, as long term that manager would be wrong half the time.

37 In his opinion, the swings in asset allocation used by Professor Charrette, with hindsight, were not common in the industry, and grossly overstate the returns a manager can get from the market. The analogy he used is having a dollar and knowing the winning number, investing it in a 649 ticket bearing that number

PROFESSOR KIRZNER

38 Professor Kirzner holds an M.B.A., and has been teaching business and investments since 1971, at the University of Toronto, Rotman School of Management since 1989. He holds a Chair there in value investing. He has also, through the years, acted as the advisor, committee chair or director of a great number of corporations and organizations, is the author or co-author of numerous books and articles on investing, has been frequently employed as a consultant and often called on as an expert witness in areas of finance and investing. He was accepted without question as an expert on the issues on trial here. His C.V. and will say were accepted together as Exhibit Number Nine.

39 His will say is essentially a scholarly attack on tactical asset allocation, and the conclusion that the premise of using that approach with hindsight is hopelessly flawed and leads to results which in his opinion are in fact impossible to obtain. He footnotes his observation by noting "I realize there is a legal principle underlying this approach; I am confining my comments to generally accepted investment practice."

40 In his evidence in court, he agreed that having a small range for asset allocation is common to provide flexibility in deciding when to rebalance a portfolio to target, and that using that flexibility, can be called dynamic asset allocation. Part of that approach might be selling individual stocks at high prices to realize value and reinvesting in stocks at low prices. He said that if the portfolio policy calls for market timing, then the manager is entitled to follow that. Generally that is not the portfolio policy. He would look to a range of say two per cent to avoid having to rebalance the portfolio every day. In his view, a ten per cent range each way is more like a provision for tactical allocation. He testified that he has been following and analyzing mutual funds for years and that many but not all of the balanced funds have a fixed asset allocation. Some have permitted ranges of two or three per cent and some are more flexible but a large part of the ones with ranges have a range of two per cent.

41 In cross-examination, he agreed that the permitted swings in asset make up in the Canada Pension Plan portfolio and in others of up to five to ten per cent was not out of the way and that in a balanced fund, whether a portfolio was 50/50, 40/60, or 60/40, it would still be a balanced fund.

SUBMISSIONS

42 Because the court time available had been used up in examination and cross-examination of witnesses, counsel on both sides were requested to provide written argument, which they did in due course.

CLASS COUNSEL'S POSITION

43 After reviewing the law, and many examples of judicial notice, class counsel summed up the position of the crown witnesses by saying that the idea of shifting of assets within fixed limits is a well known practice, but it may not be a prudent one. Class submission is that this approach misses the issue as the court here, to properly assess the damages in this case has to look over a historic progression of events retrospectively, not prospectively, because the court is attempting to assess damages for something the Crown never did (but should have done). Class counsel argues that Crown experts agreed, if a retrospective approach was allowed, that Professor Charrette's calculations are correct, and points to a series of questions from 37 to 44 in Professor Kirzner's cross-examination, ending with question 44 "Q. What I am asking you is if you use his algorithm, and you use the limited flexibility as proposed by Justice Brockenshire, would you agree then that Charrette's calculations are acceptable and accurate? A. I'm going to say generally yes. The only exception is there seems to be some dispute about some errors in calculations and so on. But leaving that issue aside, which is not my area, did he apply the algorithm correctly within the assumptions you've asked me to make that he made? Yes."

44 Class counsel also points to an affidavit of David Yu, a Crown expert, who's affidavit was filed in a previous proceeding, and which pointed to problems in the bond markets in 1994, 1999, and 2001. He said at paragraph 26 of his affidavit that, "Many fund managers repositioned their funds in order to reduce the risk exposure and minimize the impact of market fluctuations on portfolio return." Later, at paragraph 27 of the same affidavit, Mr. Yu had said, "A dramatic example of this volatility occurred during the late 1970's and early 1980's, when interest rates rose to record levels. Similar consequences as those referred to above resulted in large scale repositioning within the industry ..."

45 Class counsel looked to the evidence of its witness, Mr. Amad, who described the portfolio called for in my December 31st, 2004 judgment as a rather conservative balanced portfolio. His evidence confirmed that it is common in the investment industry to have investment policies, including for government sponsored plans, which allow for shifting of assets even when there is a target asset allocation mix and that, in his experience, the ranges I had provided are conservative.

46 Mr. Barrasso alluded to his own experience, and the policy statements of Royal Trust, where asset mix ranges are typically used, and testified that in his experience most financial institutions have these kind of investment mandates, providing for target weights and upper and lower ranges. In his view, a plus or minus ten per cent range in each asset category is reasonable. Exhibit Number Six, introduced through Mr. Barrasso, graphically shows that a wide range of pension plans and mutual funds use portfolios with ranges for the asset makeup.

47 The analysis by class counsel of the Crown witnesses was that all of them agreed that it is common to have a portfolio with asset allocation mixes and it is common to have expressed ranges within which such assets could be shifted from time to time. They all pointed to the problems of "tactical asset allocation" in which a manager attempted to anticipate changes in the market, but did not deal with the required legal concept of "the full benefit of hindsight." Therefore, their evidence as to what would be appropriate has to be rejected.

48 The class position is therefore that the general acceptance in the financial community of the ability of portfolio managers to shift, within limits, the asset allocations of the portfolio "is (a) so notorious as to not be the subject of dispute among reasonable persons, or (b) capable of immediate and accurate demonstration by resorting to readily accessible sources of indisputable accuracy."

THE CROWN POSITION

49 The Crown approach was to not deal directly with the issue now before the court, but the issue underlying it - the authority and/or propriety of allowing for swings or bands, rather than simply using fixed asset allocations for an investment portfolio, or alternately, permitting bands so wide as to foster "tactical asset allocation." Further, there was an attack on the way Professor Charrette made use of the hindsight rule.

50 These issues properly belong in the argument relating to the quantum itself, rather than in argument relating to judicial notice, and I will deal with them there.

51 On the issue of judicial notice itself, the Crown argues that it had produced considerable expert evidence demonstrating that the use of asset swings was not commonplace and also that, even when used, it has been demonstrated not to be a successful investment strategy. Crown concedes in paragraph 18(a) of its written argument that "both the plaintiff and the crown's evidence has been consistent that bands or ranges are often set around target or benchmark asset allocations, and have been used by portfolio managers from time to time."

52 The dispute of the Crown is therefore not that bands or ranges are not commonly used, which use is commonly recognized, but rather that in the financial community these bands or ranges are used to avoid continuous rebalancing, which is recognized as acceptable, or for market timing purposes, which is largely regarded as improper and unlikely to succeed. The Crown position is that if the bands or ranges are to be there simply to protect against perpetual rebalancing, then they are too wide, and points to the ranges of five per cent on each side of benchmark allocations, followed by Royal Trust.

53 This whole area gets into exploration of the hindsight principle, which I will deal with in my assessment of damage decision.

54 The Crown written argument also, in paragraph 52, states that the series of simplified prospectuses at Tab 6, 7 and 8 of Exhibit Number Six had no relevance as there is no evidence as to the investment practices of any of these funds.

REPLY OF CLASS COUNSEL

55 Class counsel filed a brief written reply argument, in which it responded to the arguments as to the foreseeability and market timing issues raised by the Crown but also responded specifically to the Crown looking to a five per cent leeway on either side in Royal Trust portfolios. Class counsel points out that there were other model portfolios providing for a plus or minus ten per cent leeway. There was evidence concerning two trusts where a much greater leeway was employed. Class counsel argues crown counsel ignores the examples filed of Canada Pension Plan investment statements showing the plus or minus ten per cent deviation.

56 Class counsel also picks up on the Crown argument that the simplified prospectuses of investment funds lacked any evidence as to the investment practices and points out that each of those simplified prospectuses contained statements as to the investment practice to be followed by the fund.

DISCUSSION

57 The judicial authorities, gathered by class counsel and essentially undisputed by Crown counsel, indicate that on a trial of the issue of whether judicial notice can be taken of something, the usual rules of evidence are relaxed and materials may be put before the court without the usual formal proof, the court can actively seek out and examine reference materials such as dictionaries, atlases, etcetera, and witnesses may be called to testify as to the knowledge they have. Here, in my original judgment I had referred to the mutual fund industry. No one was called from that industry, but a number of simplified prospectuses from a number of mutual funds were produced and in the same way, a number of statements from large pension funds, including the Canada Pension Plan, were produced. This kind of documentation is valid and acceptable in an inquiry of this kind, and I found it helpful.

58 Additionally, class counsel called two witnesses and Crown counsel called three. All of these persons were accepted as experts in their particular areas of the broad field of investment practices.

CONCLUSION

59 The simple summation, as is indicated in the foregoing detailed discussion of the documents and of the viva voce evidence is that the court could indeed take judicial notice of the general acceptance in the financial community of the ability of portfolio managers to shift, within limits, the asset allocations in a portfolio.

60 I comment that the evidence before me shows "a general" acceptance. There it is not a universal acceptance, in that there are some portfolios in which asset allocations are made and no explicit authority to deviate is provided. The evidence before me indicated that when this is done, the inevitable result is either that the manager operates outside of the expressed mandate provided, or inordinate transaction costs are incurred in perpetual re-balancing.

61 This decision confirms the taking of judicial notice of "approach of providing a basic asset allocation mix, but with provisions for variance from the norms within that fixed limits ..." made in paragraph 146, and explained by the above quote in paragraph 147 of my decision released December 31st, 2004.

POSTSCRIPT

62 While the general issue of judicial notice has been resolved in the affirmative, evidence and argument before me indicated more fully than the evidence and argument before my previous decision of December 31st, 2004, that there are very real differences of opinion, and very real and cogent arguments over both the limits within which portfolio managers should be allowed to shift asset allocations, and the reasons that a portfolio manager may validly have for making such shifts. Underlying all of this is the obvious complete unfamiliarity in the financial community with the concept of applying hindsight to investment decisions, because of the obvious impossibility of being able to do so under the normal circumstances of financial decision making. These issues will be dealt with in my decision on the assessment of damages.

J.H. BROCKENSHIRE J.

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