Emily Cooper Cole

During the 117th day of a protracted hearing on the merits, four respondents brought a motion requesting permission to file written witness statements in lieu of oral examinations-in-chief for their remaining witnesses.

The respondents argued this was necessary to ensure the hearing concluded by the scheduled deadline and to prevent the exhaustion of their funding, relying on the Supreme Court's direction in Hryniak regarding proportionality and access to justice.

Staff opposed the motion, arguing that credibility was at issue and written statements would provide a 'varnished version' of the facts.

The Panel granted the motion, finding that the slight prejudice to Staff in not observing the witnesses during examination-in-chief was outweighed by the necessity to complete the hearing efficiently and the significant costs already incurred by all parties.

In this proposed securities class action arising from the collapse of a public issuer, the plaintiffs sought leave under Part XXIII.1 of the Securities Act and certification of claims on behalf of purchasers of notes and shares in the primary and secondary markets.

Subject to one contested issue concerning former noteholders who had assigned their notes during the class period, the motions were unopposed or proceeded on consent.

The court granted leave and certified the action, holding that the substantive dispute over whether assigned noteholder claims vested in transferees under New York law should be postponed until after certification.

The court found it procedurally preferable and fair to defer that merits issue until after a defence was delivered, thereby avoiding interlocutory delay in a large and complex class proceeding.

The appellants, auditors and underwriters of Sino-Forest Corporation, appealed an order declaring that their claims for contribution and indemnity against Sino-Forest were 'equity claims' under the Companies' Creditors Arrangement Act (CCAA).

The claims arose from proposed shareholder class actions alleging misrepresentation.

The Court of Appeal dismissed the appeal, holding that the definition of 'equity claim' in s. 2(1) of the CCAA focuses on the nature of the claim rather than the identity of the claimant.

The court found that the appellants' claims for contribution and indemnity were clearly connected to the shareholders' equity claims and thus fell within the expansive statutory definition.

In CCAA restructuring proceedings, shareholder class action plaintiffs sought to limit the scope of a stay of proceedings so that certification, leave, and amendment motions in related Ontario and Quebec securities class actions could proceed against auditors, underwriters, and former directors.

The court applied the established test for lifting a CCAA stay, considering relative prejudice, balance of convenience, and the merits.

Given the pending appeal concerning whether shareholder claims constituted “equity claims” under the Companies’ Creditors Arrangement Act and the imminent creditor meeting regarding a proposed plan of arrangement, the court found that maintaining the stay temporarily would avoid prejudice and promote orderly proceedings.

The court held that the balance of convenience favoured maintaining the stay so that the auditors and underwriters could focus on the appeal and restructuring process.

The motion to limit the stay was dismissed without prejudice to renewal after the creditor meeting.

In a proposed securities class action alleging misrepresentations in the primary and secondary markets, the plaintiffs sought an order compelling defendants to deliver statements of defence and requested that the certification motion be heard together with a leave motion under s. 138.8 of the Securities Act.

The defendants opposed delivering defences before certification and sought a sequence of motions beginning with the leave motion, followed by Rule 21 motions and then certification.

The court held that pleadings should generally be completed before certification and that ordering the delivery of a statement of defence was not contrary to law or due process.

However, the court limited the requirement to defendants who filed affidavits under s. 138.8(2) of the Securities Act, while permitting other defendants to plead voluntarily without losing the ability to bring Rule 21 motions.

The court further ordered that the leave motion and certification motion be heard together to avoid delay, inefficiency, and serial appeals.

The Ontario Securities Commission held a hearing to consider a settlement agreement between Staff and the respondents, Ernest Anderson and Golden Gate Funds LP.

The respondents admitted to engaging in unregistered trading and illegal distribution of securities, raising over $8 million from investors without a prospectus or registration.

The Commission approved the settlement, ordering permanent market bans, an administrative penalty of $126,795, disgorgement of $4,644,258.10, and $20,000 in costs.

Staff of the Ontario Securities Commission brought a proceeding under subsections 127(1) and 127(10) of the Securities Act seeking reciprocal orders against the respondents based on orders made by the Alberta Securities Commission and other provincial regulators.

The Commission found it in the public interest to grant the requested orders.

Petroleum Unlimited LLC and Roger A. Kimmel Jr. were ordered to cease trading in securities and were denied exemptions under Ontario securities law for a period of seven years.

Global Petroleum Strategies LLC was permanently ordered to cease trading and permanently denied exemptions.

Staff of the Ontario Securities Commission sought a permanent order imposing sanctions against the respondent under the inter-jurisdictional enforcement provision of the Securities Act.

The respondent had previously consented to a final judgment in the United States for orchestrating a fraudulent scheme involving the sale of unregistered securities and misappropriating investor funds.

The Commission found that the respondent's conduct in the US was egregious and contrary to the public interest.

The Commission granted the order, permanently banning the respondent from trading in securities, acquiring securities, and acting as a director or officer of any issuer.

Staff of the Investment Dealers Association of Canada (IDA) applied for a hearing and review of an IDA Hearing Panel's penalty decision regarding two registered representatives who facilitated manipulative trading.

IDA Staff argued the Hearing Panel erred in principle by imposing a two-month suspension, $25,000 fines, and $40,000 in costs, which was less than the requested sanctions.

The Ontario Securities Commission dismissed the application, finding that the Hearing Panel considered the appropriate factors, including the respondents' ability to pay, their legal costs, and their subsequent compliance, and did not proceed on any incorrect principle.

The respondents brought a motion challenging the standing of the Investment Dealers Association (IDA) or its staff to apply for a hearing and review of an IDA disciplinary hearing panel decision under section 21.7 of the Securities Act.

The Commission dismissed the motion, finding that the IDA is a 'person directly affected' by the decision of its independent hearing panel and therefore has standing to seek a review.

The Commission held that this interpretation is consistent with the IDA's regulatory mandate and the purposive interpretation of the Act.

The respondents brought a motion for particulars regarding allegations of illegal trading and distributions under the Securities Act.

They argued that the Statement of Allegations and the voluminous disclosure provided by Staff were insufficient to allow them to know the case to meet.

The Commission held that while Staff is not required to meet the strict standard of a criminal proceeding, the duty of procedural fairness requires sufficient particularization of the material facts.

The Commission directed Staff to provide additional specific particulars regarding the alleged illegal distributions, solicitation meetings, and representations, but dismissed the motion to enforce an alleged undertaking by Staff.