Caroline Harrell

The appellant, a corporate officer and sole director, appealed a judgment finding him personally liable for civil fraud arising from his company's failure to deliver 3 million NIOSH certified N95 masks during the COVID-19 pandemic to a Quebec hospital network, after receiving over US$11 million in advance payment.

The Court of Appeal dismissed the appeal, holding that the trial judge applied the correct threshold for recklessness in finding civil fraud and that the law clearly supports personal liability of officers and directors for fraudulent conduct, without needing to assess whether the conduct was "tortious in itself" or exhibited a "separate identity or interest."

The Ontario Securities Commission appealed an order appointing a receiver over Cacoeli Asset Management and related entities pursuant to section 129(1) of the Securities Act.

The appellants argued that the appointment of a receiver requires a strong prima facie case of breaches of the Act.

The Court of Appeal upheld the lower court's decision, holding that the correct evidentiary standard is a serious concern that there have been possible breaches of the Act.

The court found that the OSC had met this standard based on evidence that funds raised from investors for specific projects were diverted to other purposes without investor disclosure or consent.

The Court of Appeal for Ontario dismissed the appellants’ motion for a stay of a receivership order appointing a receiver under section 129 of the Securities Act.

The court found that while there was a serious issue to be tried, the appellants failed to establish irreparable harm and the balance of convenience did not favour a stay.

The decision reviews the background of the receivership, the test for a stay, and the evidence presented, ultimately concluding that the public interest and interests of third parties, including mortgagees, would be harmed by a stay.

The Ontario Securities Commission (OSC) applied for the appointment of a receiver over the respondents under section 129 of the Securities Act.

The parties sought directions from the court regarding non-disclosure obligations under sections 16 and 17 of the Act, particularly concerning the production and use of investigation materials.

The court endorsed a protocol allowing redacted and unredacted affidavits to be filed, balancing the need for confidentiality with the respondents’ right to make full answer and defence.

The court also addressed scheduling and adjournment of the application, confirming the interim monitorship and setting a new hearing date.

The applicants, trustees of two family trusts, sought rectification of sections of their trust deeds nunc pro tunc to correct a drafting error.

The error inadvertently prohibited the distribution of dividends from a family operating company (Signature Realty Inc.) to a corporate beneficiary (2267134 Ontario Inc. or "Holdco"), contrary to the parties' original intention for tax-efficient asset reduction.

The Canada Revenue Agency (CRA) had reassessed the trusts based on this prohibition.

The court applied the four-part Fairmont test for rectification, finding that a clear prior agreement existed, the instrument failed to accurately record it, the agreement was still effective, and rectification would carry out the agreement.

The court distinguished this case from situations involving retroactive tax planning, as the parties sought to correct a document that did not reflect their unchanged agreement, rather than to amend the agreement itself to avoid tax consequences.

The Attorney General of Canada did not oppose the application.