Andrew Morganti

The plaintiffs brought a motion for leave to proceed under s. 138.3 of the Ontario Securities Act, certification of a class action under s. 5(1) of the Class Proceedings Act, 1992, and default judgment against a defendant CEO of a cannabis company who failed to plead or appear despite extensive service efforts.

The defendant had been the subject of Mareva injunctions for moving assets internationally.

The court found the certification criteria were satisfied, granted leave under the OSA, and entered default judgment in the amount of $53,616,189 based on uncontroverted expert evidence of class-wide primary and secondary market damages arising from misrepresentations in public filings about the company's cannabis production facility.

The insurer for an insolvent corporate defendant and a missing individual defendant brought a motion on short notice to intervene and appoint a litigation guardian.

The plaintiffs, who had been preparing to argue their motion for leave to proceed with a secondary market cause of action under the Securities Act, sought an adjournment due to the late service of the insurer's motion record.

The court adjourned the insurer's motion to allow the plaintiffs to respond, and consequently adjourned the plaintiffs' leave motion, as the outcome of the insurer's motion could significantly alter the defense.

Following the dismissal of the plaintiff's motion for the production of documents prior to a leave motion under the Securities Act, the successful defendants sought their costs.

The court awarded partial indemnity costs to the corporate defendant and one individual defendant.

The court awarded substantial indemnity costs to the other individual defendant, finding that the plaintiff's conduct in pursuing the motion against him and making unfounded allegations of deliberate misconduct was unreasonable and warranted sanction.

The plaintiff was ordered to pay a total of $36,603.87 in costs.

The plaintiff sought leave to proceed with a putative shareholders' class action for secondary market liability under s. 138.3 of the Securities Act.

The claim alleged that the defendant made material misrepresentations regarding a cannabis facility build-out project and joint venture, which were later publicly corrected, causing a significant drop in share price.

The court found the action was brought in good faith and that there was a reasonable possibility of success at trial, rejecting the defendant's expert economic evidence that the market had already absorbed the news.

Leave to proceed was granted.

The plaintiff sought approval of a settlement and class counsel fees in a securities class action alleging secondary market misrepresentations by the defendant regarding a cannabis cultivation project.

The court found the settlement, which exhausted available insurance and included a $1,000,000 contribution from the defendant, to be fair, reasonable, and in the best interests of the class.

The court also approved the plan of allocation, a $5,000 honorarium for the representative plaintiff, and class counsel fees of $1,650,000, representing 30% of the settlement amount.

The plaintiff sought leave under s. 138.8(1) of the Securities Act to bring a statutory cause of action for secondary market misrepresentation against the defendant corporation, and to certify the action as a class proceeding.

The plaintiff alleged that the defendant made material misrepresentations in its financial statements, which were later restated.

The court dismissed the motion for leave, finding that the plaintiff had no reasonable possibility of success because the specific misrepresentations pleaded were not material to a reasonable investor, and the alleged corrective disclosure did not relate to the pleaded misrepresentations.

Consequently, the certification motion was also dismissed.