Ronald Butler

The plaintiffs, who lost money in syndicated mortgage investments, sought leave under the Crown Liability and Proceedings Act, 2019 to proceed with a class action against the provincial regulator (FSCO) and its senior employees.

The plaintiffs alleged that FSCO's failure to take regulatory action earlier despite warnings of a Ponzi scheme constituted bad faith.

The court granted leave for the claim of misfeasance in public office, finding a reasonable possibility that a trial judge could infer bad faith from FSCO's inexplicable carelessness.

However, leave was denied for the claims of misconduct by a public authority (which does not exist in Ontario) and negligence (as FSCO owed no private duty of care to individual investors).

The court considered a motion to strike or exclude expert reports filed by the plaintiffs in a proposed class action concerning alleged regulatory failures in the oversight of syndicated mortgage investments.

The court found that the expert evidence was relevant to the leave motion but ultimately struck the affidavit of one expert and portions of another for lack of impartiality and proper qualifications.

The decision clarifies the threshold requirements for admissibility of expert evidence, including relevance, qualifications, and impartiality, in the context of motions for leave under the Crown Liability and Proceedings Act, 2019.

The plaintiffs, Valerie Barkley and Ronald Beaupre, brought a motion for default judgment against Nicholas Dookhie and Diane Chetram, who were noted in default in a class action concerning losses from a syndicated mortgage investment.

The court found Dookhie and Chetram liable for negligence, negligent misrepresentation, and breach of fiduciary duty, having failed to meet the standard of care for mortgage brokers by not performing due diligence, misrepresenting the investment as safe, and failing to assess client suitability or provide required disclosures.

The motion was granted, awarding the subclass of 11 class members $434,017.40 plus pre- and post-judgment interest at rates of 12% or 9% depending on the investor's referral source.