Owning the relationship with a client doesn't necessarily mean owning every stream of revenue attached to that client. The British Columbia Court of Appeal applied that distinction in ADP Financial Ltd. v. AWM Financial Services Inc., a dispute over $886,392.08 paid when a life insurance broker moved its business from one managing general agency to another.
ADP sold Canada Life insurance policies through an agency that administered policies and received servicing fees from the insurer. In 2023, ADP arranged to transfer its client book to a different managing general agency. Canada Life routed a transfer payment to the outgoing agency. ADP had agreed to bear that expense, but then sought repayment from the former agency.
The broker argued that letters exchanged between 1999 and 2009 gave it the right to take back its book of business and all associated servicing revenue. In those letters, the agency had agreed that the business could be released and transferred back to the broker. ADP said that promise meant the agency couldn't demand compensation on transfer.
The trial judge disagreed. The promise was made in a commercial setting where an agency could impede a broker's ability to move client accounts. Agreeing not to block a transfer did not also amount to surrendering future service fees paid by the insurer. Nothing in the correspondence expressly said the outgoing agency would waive those fees.
The Court of Appeal upheld that reading. Contract interpretation required more than isolating the words about transferring the book. The judge had to consider the surrounding commercial circumstances and the agreement as a whole. The appeal court found no reversible legal error or overriding factual mistake in that approach.
ADP's own conduct also mattered. Years after the original correspondence, its principal asked the outgoing agency to sign a fresh confirmation that no transfer fee would be payable. The agency refused. The request was consistent with uncertainty about whether the old letters actually settled the question of fees. It weakened the broker's claim that the earlier promise had always been clear.
The appeal was dismissed, leaving the trial judgment and the transfer payment in place. The decision did not interpret an insurance coverage exclusion, decide a policyholder's entitlement to benefits, or create a rule that every book transfer attracts the same fee. It interpreted particular commercial agreements in a particular insurance distribution relationship.
For brokers and agencies, the drafting lesson is specific. If the parties intend a right to move clients without compensation, they need to address both the transfer of the book and the associated servicing revenue. Those are connected commercial interests, but they aren't interchangeable legal rights. The agreement should make clear whether fees cease, continue, transfer or require a separate settlement when the brokerage relationship ends.