Securities Law

This decision concerns three related matters: the appointment of a receiver over the assets of Sussman Mortgage Funding Inc. and related companies, the granting of a Mareva injunction against Sanford Sussman, and the scheduling of a motion to appoint representative counsel for investors.

The court finds the appointment of B. Riley Farber Inc. as receiver to be in the public interest and grants the Mareva injunction on consent.

The decision addresses the statutory and common law bases for receivership, the public interest in protecting investors, and the coordination of proceedings involving multiple stakeholders.

The Court of Appeal for Ontario dismissed Binance's appeal from the certification of a class action brought by Canadian investors who purchased cryptocurrency derivatives through Binance.

The court upheld the motion judge’s finding that the claim disclosed reasonable causes of action under both the Securities Act and at common law, and that the requirements for certification under the Class Proceedings Act were met.

The court rejected Binance’s arguments regarding the statutory and common law causes of action, the commonality of issues, and the appropriateness of class-wide remedies, finding no reversible error in the motion judge’s analysis.

Terra Firma Capital Corporation sought court approval for a plan of arrangement under section 182 of the Business Corporations Act (Ontario), which would result in GM Capital Corp. acquiring all outstanding common shares of Terra Firma it did not already own.

The arrangement was overwhelmingly approved by both shareholders and minority shareholders.

The court applied the three-part test for approving arrangements, confirming that statutory procedures were met, the application was made in good faith, and the arrangement was fair and reasonable, supported by strong shareholder approval, board recommendations, and fairness opinions.

The final approval order was granted.

The appellant, David Wong, representing a class of shareholders, appealed the summary dismissal of a secondary market misrepresentation class action against Pretium Resources Inc. and its former CEO.

The claim alleged that Pretium failed to publicly disclose concerns about its Brucejack mining project's resource estimate and feasibility study, which had been conveyed by Strathcona Mineral Services Ltd. The Court of Appeal upheld the motion judge's decision, finding that Strathcona's concerns were not material facts requiring disclosure because they were unsolicited, inexpert, premature, and unreliable opinions, not undisputed facts.

The court also found no error in the motion judge's alternative finding that the respondents had conducted a reasonable investigation.

The appeal was dismissed.

The case involved a claim by Scotia Capital Inc. against Aphria Inc. for an "Independence Fee" under an engagement letter for financial advisory services in defending a hostile takeover bid, and a counterclaim by Aphria for defamation related to Scotia's discontinuation of analyst coverage.

The court found that Scotia successfully defended Aphria against the takeover bid, entitling it to the Independence Fee.

The court dismissed Aphria's defense arguments of lack of causality and repudiation.

The court also dismissed Aphria's counterclaim for defamation, finding no evidence that the discontinuation of coverage lowered Aphria's reputation or caused economic loss.

The plaintiff in a proposed securities class action sought an "exclusivity order" to prevent other actions on the same subject matter from being commenced in Ontario without leave of the court.

The defendants did not object.

The court denied the request, emphasizing that Ontario's established procedure for managing competing class actions involves a "carriage motion" once rival claims emerge, rather than a pre-emptive exclusivity order.

The court distinguished the Federal Court's "inclusivity order" in Heyder v. Canada (Attorney General) as not overriding Ontario's endorsed approach.

This is an appeal from a certification judge's order refusing to certify an investor class action and dismissing the action on the basis that the pleadings did not disclose a reasonable cause of action.

The proposed class action arose from the dramatic collapse of a derivatives-based exchange-traded fund (ETF) managed by the respondent, Horizons ETFS Management (Canada) Inc., which lost almost 90% of its value overnight.

The appellant, Graham Wright, alleged negligence and misrepresentations in the prospectus under s. 130 of the Securities Act.

The certification judge dismissed both claims.

The Court of Appeal allowed the appeal in part, finding that the negligence claim did disclose a reasonable cause of action.

For the s. 130 Securities Act claim, the Court found it did not disclose a reasonable cause of action as pleaded but granted leave to amend the statement of claim to assert the purchase of 'Creation Units', remitting the matter to the certification judge for further determination of certification criteria.

This continued case conference endorsement addresses the plaintiff's request to adjourn a multi-day leave motion in a proposed class action until an in-person hearing is possible, due to concerns about conducting a complex hearing virtually during the COVID-19 pandemic.

The defendant was prepared to proceed virtually.

The court, acknowledging the evolving confidence in virtual hearings and the need for courts to operate, ordered the motion to proceed by videoconference on the previously scheduled dates of June 23 and 24, 2020, finding that remote procedures are not inherently unfair and practical issues can be addressed through cooperation.

This trial decision addresses a complex dispute arising from the sale of a business, involving a promissory note default, failure to assume a lease, and subsequent seizure of assets.

The vendor (plaintiffs) sought to recover a deficit, while the purchaser (defendants) counterclaimed for unlawful seizure and damages.

The court found the purchaser in default of the promissory note and the lease assumption.

It determined that notice prior to seizure was not required under the Personal Property Security Act's exception for collateral customarily sold on a recognized market, and that the vendor's actions, while dishonourable, did not breach the duty of honest performance.

Damages were assessed, adjusting the plaintiffs' claim by reducing excessive storage fees and crediting the defendant for an undervalued asset sale.

The plaintiff sought leave to proceed with a class action for secondary market misrepresentation against a company and its officers.

The claims arose from an unauthorized investment made by the CEO, which was not fully disclosed in subsequent financial statements and press releases.

The court granted leave, finding a reasonable possibility that the CFO knew or deliberately avoided knowing about the unauthorized investment, and that a press release announcing the CEO's departure constituted a public correction, signaling concerns about the CEO's conduct related to the investment.

The appellant, a real estate company, appealed an order enforcing the respondent's rights under fitness equipment leases and general security agreements.

The respondent had leased fitness equipment to numbered companies operating fitness facilities in premises owned by the appellant.

When the lessees defaulted, the respondent sought to repossess the equipment, but the appellant prevented access and removed equipment to undisclosed locations.

The application judge granted broad declaratory relief and repossession rights.

The Court of Appeal upheld the order, finding no procedural unfairness, that the relief was consistent with the lease terms and PPSA provisions, and that the inventory schedules were necessary to account for equipment the appellant had moved among its properties.

Various defendants brought motions to strike the plaintiffs' statement of claim, which alleged civil conspiracy, defamation, intentional interference with economic relations, and unjust enrichment.

The court struck the claims for defamation, intentional interference with economic relations, and unjust enrichment against all applicants.

The civil conspiracy claim against one individual defendant (Moez Kassam) was struck, but the conspiracy claims against the remaining Anson Corporate Defendants, Adam Spears, Sunny Puri, ClaritySpring Inc., Nathan Anderson, Richard Molyneux, and Darryl Levitt were allowed to proceed.

The court also clarified that 'whistleblower' complaints to the Ontario Securities Commission are subject to absolute privilege and do not constitute the commencement of legal proceedings for the tort of abuse of process.

The plaintiff investment dealer, Raymond James Ltd. (RJL), terminated its agency agreement with the defendant investment advisor, Jayanth Noronha, after discovering he was involved in off-book investments and using personal email for business, contravening RJL's compliance manual and IIROC rules.

Upon termination, the outstanding balance of a forgivable loan to Noronha became immediately due.

RJL sued for this balance, while Noronha counterclaimed for wrongful termination and breach of good faith, alleging RJL sought to misappropriate his book of business.

The Investment Industry Regulatory Organization of Canada (IIROC) subsequently found Noronha guilty of multiple rule violations, including off-book trading, undisclosed remuneration, conflict of interest, and deleting email records, leading to a lifetime ban.

RJL moved for summary judgment.

The court found no genuine issue for trial, holding that the loan was contractually due upon termination, and Noronha's termination was justified by his regulatory breaches, not a pretext to seize his client base.

The IIROC findings further confirmed the validity of RJL's actions.

The motion for summary judgment was granted, allowing RJL's claim and dismissing Noronha's counterclaim.

This appeal concerns the interpretation and application of section 76(5)(e) of the Securities Act regarding insider trading and tipping liability for successive tippees.

The appellants received material non-public information about a takeover bid for Masonite International Corporation through a chain of tippers.

The core issue is whether successive tippees who did not have actual knowledge that their source was in a special relationship with the issuer "ought reasonably to have known" this fact.

The Court of Appeal upheld the Ontario Securities Commission's findings against Miller but reversed the Divisional Court's decision to overturn findings against Cheng, restoring the OSC's liability and sanctions determinations.

The plaintiff sought leave under s. 138.8 of the Ontario Securities Act to commence an action for secondary market misrepresentation against Pretium Resources Inc. and Robert A. Quartermain.

The plaintiff alleged that the defendants failed to disclose material facts regarding conflicting expert opinions on the validity of a mineral resource estimate for the Brucejack Project, leading to a significant drop in share price.

The court granted leave, finding that the plaintiff established a reasonable possibility of success at trial.

The court determined that the concerns raised by Strathcona Mineral Services, a respected mining consultant, were material facts that a reasonable investor would consider important, despite Pretium's belief that the data was unreliable.

Furthermore, the court found a reasonable possibility that the defendants would not be able to establish the "no reasonable grounds to believe" branch of their reasonable investigation defense under s. 138.4(6) of the OSA.

Martin Gerard, as plaintiff in a class action against Detour Gold Corporation and Gerald Panneton, moved for court approval of a settlement agreement, a distribution plan, class counsel fees of $1,620,000 plus disbursements and taxes, and honoraria for the representative plaintiffs.

The court, having previously certified the class action for settlement purposes, found the $6 million settlement and distribution plan to be fair, reasonable, and in the best interests of the class, considering factors such as the likelihood of success, the arm's-length negotiations, and the absence of objections.

The court also approved the requested class counsel fees and honoraria for the representative plaintiffs, Martin Gerard and Terry Wright, acknowledging their significant efforts.

This appeal concerns whether a proposed securities class action asserting a statutory cause of action for misrepresentation under Part XXIII.1 of the Ontario Securities Act was time-barred by the three-year limitation period in section 138.14.

The appellant commenced a class action in May 2009 but did not bring a motion for leave to proceed with the statutory claim within the limitation period.

The motion judge refused to grant leave nunc pro tunc (retroactively), finding that the appellant failed to meet the test established by the Supreme Court of Canada in Canadian Imperial Bank of Commerce v. Green.

The Court of Appeal upheld the motion judge's decision, finding no error in principle in the exercise of discretion to deny nunc pro tunc relief.

The Trustee in Bankruptcy appealed a Registrar's decision that allowed a secured claim by Snap Auto Finance Corp. The Trustee had initially disallowed Snap's claim, arguing that Snap failed to perfect its security interest in a vehicle within the timeframes required by Ontario's Personal Property Security Act (PPSA) after the vehicle was brought into Ontario.

The Registrar found the vehicle had not been "brought in" to Ontario.

The Superior Court found the Registrar erred by not considering the debtor's assignment in bankruptcy in Ontario and his sworn Statement of Affairs, which indicated Ontario residency.

The Court concluded the vehicle was "brought in" to Ontario in November 2015, and Snap failed to perfect its security interest within the statutory 60 days or 15 days of notice.

The Trustee's appeal was allowed, restoring the disallowance of Snap's secured claim, making Snap's interest subordinate to the Trustee's.

This decision addresses eight motions in a billion-dollar secondary market securities class action.

The court granted motions by SNC-Lavalin and its Outside Directors to strike paragraphs from the Plaintiffs' Amended Reply and dismissed the Plaintiffs' motion to deliver a Fresh as Amended Reply, finding that the Plaintiffs were attempting to plead a new, uncapped liability claim without leave and reintroduce previously rejected allegations of bribery in Libya.

The court also granted motions by the Outside Directors and Michael Novak to strike paragraphs from Riadh Ben Aïssa's Statement of Defence, which similarly attempted to introduce allegations of bribery in Libya and knowledge against co-defendants beyond the scope of the granted leave.

Additionally, the court granted protective orders for the examinations for discovery of Messrs.

Ben Aïssa, Duhaime, and Roy, who faced criminal charges, to protect their Charter rights and the integrity of criminal proceedings, but denied requests to stay or postpone discoveries.