Douglas M. Worndl

In a securities class proceeding under the Class Proceedings Act, 1992 and the Securities Act, the plaintiffs sought certification for settlement purposes against certain underwriters, approval of three settlements totalling approximately $10.85 million, approval of counsel fees, and approval of a proposed plan of allocation.

The court held that the settlements were fair, reasonable, and in the best interests of the class and approved them, along with counsel fees and the appointment of an administrator.

However, the court rejected the parties’ proposed distribution plan because it excluded class members who purchased shares on the day of the corrective disclosure from any compensation.

Exercising its authority to determine the plan of allocation, the court varied the distribution plan to include those purchasers and approved the modified plan as fair and reasonable.

The plaintiff brought a motion to compel the defendants to answer questions and produce documents refused during cross-examination on an affidavit filed in response to a certification motion in a proposed securities class proceeding.

The dispute concerned the interpretation of s. 138.8(2) of the Ontario Securities Act, which governs affidavit evidence on a motion for leave to commence a statutory secondary market misrepresentation claim under Part XXIII.1.

The plaintiff argued that because the defendants filed an affidavit addressing certification, they should be required to answer questions relevant to the leave motion.

The court followed the line of authority beginning with Ainslie v. CV Technologies Inc. holding that defendants are only required to file an affidavit if they intend to lead evidence on the leave motion.

As the defendants had intentionally filed no affidavit addressing the leave motion, they could not be compelled to answer questions for that purpose.

The appellant intended to bring a class action for secondary market misrepresentation under the Securities Act against confidential sources quoted in a newspaper article about a leveraged buyout.

The appellant sought a Norwich order to compel the journalist and newspaper to disclose the sources' identities.

The Court of Appeal dismissed the appeal, holding that while the appellant met the threshold for a Norwich order, the respondents satisfied the Wigmore test for journalist-source privilege.

The public interest in protecting the confidential sources outweighed the public interest in the appellant's weak proposed action.

In a proposed securities class action, the plaintiffs sought leave under s. 138.8 of the Ontario Securities Act to commence a statutory secondary market misrepresentation claim against certain corporate directors.

The defendants had been noted in default and did not oppose the motion.

The court held that the statutory leave test requires a showing that the action is brought in good faith and that there is a reasonable possibility it will succeed at trial.

Given the deemed admissions arising from the defendants’ default and the evidentiary record concerning alleged misrepresentations in financial disclosure documents, the court found the threshold satisfied.

Leave to proceed against the directors under Part XXIII.1 of the Act was granted.

In a proposed securities class action arising from the collapse in value of a publicly traded corporation’s shares following accounting audit issues, the plaintiffs sought an order permitting substituted service of motion materials on foreign-resident defendants in China.

The request was urgent due to a potential limitation period expiry for secondary market misrepresentation claims under Part XXIII.1 of the Ontario Securities Act.

Although China is a signatory to the Hague Service Convention and ordinarily requires service through its central authority, the court held that substituted service remained available where defendants had attorned to Ontario’s jurisdiction or appointed an agent for service in Canada.

The court found that the defendants’ roles as officers and directors of an Ontario corporation and their submissions to Ontario securities regulatory processes established sufficient connections to Ontario.

The court concluded that the plaintiffs had taken reasonable steps to locate and serve the defendants and that substituted service was reasonably likely to bring the proceeding to their attention.

In a proposed class action for alleged misconduct in the primary and secondary securities market, the defendant corporation was unresponsive to proceedings.

The insurers of the corporation's officers and directors brought a motion on behalf of the corporation to appoint a receiver to defend the claims.

The plaintiffs and other defendants did not oppose the appointment.

The court found it fair, just, and necessary to appoint a receiver and granted the order.

After dismissing an application for a Norwich order compelling a newspaper to reveal confidential sources related to a business news story, the court addressed the issue of costs.

The unsuccessful applicant argued that no costs should be awarded because the proceeding raised novel and public interest issues linked to a proposed securities class action.

The court held that although the litigation had some public interest elements, it was fundamentally a private claim seeking recovery of trading losses.

Applying the factors in Rule 57.01 and considering the access to justice concerns noted by the Court of Appeal in class action jurisprudence, the court reduced the respondents’ claimed costs but fixed a substantial award.

Costs were ordered against the applicant on a partial indemnity basis.

The applicant sought a Norwich order compelling a journalist and newspaper to disclose the identities of confidential sources quoted in an article concerning the BCE leveraged buy-out negotiations.

The applicant alleged the sources’ statements were misleading or unlawful under the Securities Act and caused trading losses, and intended to pursue a proposed securities class action against them.

The court applied the Norwich test together with the Wigmore framework for journalist‑source privilege.

It found that any alleged breach of securities law was speculative and minimal, and that the public interest in protecting confidential journalistic sources outweighed the limited interest in disclosure for a civil claim.

The journalist‑source privilege was therefore upheld and disclosure refused.

The proposed representative plaintiff in a class proceeding alleged misrepresentations by the defendant, Canadian Solar Inc., in its secondary market disclosure.

The defendant's shares traded only on the NASDAQ exchange, not in Canada.

The defendant appealed a motion judge's finding that it was a 'responsible issuer' under s. 138.1 of the Securities Act.

The Court of Appeal dismissed the appeal, holding that the definition of 'responsible issuer' does not require the issuer's securities to be publicly traded in Canada, provided the issuer has a real and substantial connection to Ontario.

The appellants' premises were searched pursuant to an Anton Piller order obtained by the respondents.

During the search, the respondents' solicitors seized electronic documents, some of which were subject to solicitor-client privilege.

The respondents' solicitors subsequently accessed and reviewed these privileged documents without the appellants' consent.

The appellants brought a motion to remove the respondents' solicitors of record.

The Supreme Court of Canada held that where lawyers obtain access to relevant solicitor-client confidences during an Anton Piller search, they bear the onus of rebutting the presumption of a resulting risk of prejudice.

The respondents' solicitors failed to discharge this burden and were removed from the record.

The appellants' solicitors obtained an Anton Piller order and inadvertently seized documents protected by solicitor-client privilege.

The respondents moved to disqualify the appellants' solicitors.

The motion judge dismissed the motion, but the Divisional Court allowed the appeal and disqualified the solicitors.

On further appeal, the Court of Appeal established a new test for disqualification in cases of inadvertent disclosure: whether there is a real risk that opposing counsel will use the privileged information to the prejudice of the moving party, and whether that prejudice cannot realistically be overcome by a remedy short of disqualification.

The appeal was allowed and the matter remitted to the motion judge to apply the correct test.

The plaintiffs obtained an ex parte Anton Piller order to search and seize documents from the defendants' premises.

The order lacked a procedure for handling privileged documents.

During the search, electronic files containing privileged solicitor-client communications were seized and subsequently reviewed by the plaintiffs' counsel.

The defendants moved to disqualify the plaintiffs' solicitors.

The motions judge dismissed the motion, holding that the defendants had to prove pressing and substantial prejudice.

On appeal, the Divisional Court held this was an error of law; where relevant privileged documents are reviewed by opposing counsel, prejudice is assumed.

The appeal was allowed and the plaintiffs' solicitors were disqualified.

Appeal from summary judgment dismissing a negligence action arising from an aircraft landing gear collapse allegedly caused by corrosion in a component part.

The appellant purchaser sought to avoid a contractual warranty package and exclusion clause, arguing that only certain warranty parts were accepted and that the exclusion did not extend to negligence or to a post-sale duty to warn.

The court held that the accepted warranty parts expressly incorporated Part 1, including a broad exclusion of all other liabilities occasioned by the manufacturer's negligence.

Applying the principle that contractual allocations of risk prevail over tort claims, the court concluded that the exclusion barred claims for negligent design, manufacture, and failure to warn.

Appeal dismissed with costs.