The plaintiff, LBP Holdings Ltd., brought a motion in a proposed securities class action to add the defendant's underwriters (Cormark Securities Inc. and Dundee Securities Limited) as party defendants following the original defendant's bankruptcy.
The plaintiff sought to assert five claims: primary market statutory, secondary market statutory, common law negligence, common law negligent misrepresentation, and unjust enrichment.
The court granted leave to add the underwriters for the common law negligence and negligent misrepresentation claims, finding them tenable.
However, the primary market statutory claim was time-barred, and the secondary market statutory claim was untenable as underwriters were not considered "experts" under Part XXIII.1 of the Securities Act.
The unjust enrichment claim was also dismissed as legally untenable due to a valid contractual basis for fees and the principle against shareholder derivative actions for corporate wrongs.
