Gavin Christopher Smyth

Ava Trade Ltd., a British Virgin Islands-based entity, opened and operated approximately 1400 accounts for Ontario investors to trade contracts for differences (CFDs) without being registered or filing a prospectus.

Staff of the Commission and Ava Trade reached a settlement agreement acknowledging these breaches of the Securities Act.

The Commission approved the settlement, which included an administrative penalty of $550,000, disgorgement of $3.7 million, and costs of $25,000, finding it to be in the public interest.

The respondents, Dennis Meharchand and Valt.X Holdings Inc., brought a motion seeking the recusal of two members of the Commission's Staff involved in an enforcement proceeding against them, alleging tampering with evidence and bias.

The respondents also requested an adjournment of the motion hearing, which the panel denied due to a lack of exceptional circumstances and the respondents' history of delaying the proceeding.

On the merits of the recusal motion, the panel found no evidence of improper conduct or bias by Staff.

The alleged evidence tampering was an inadvertent scanning error that was promptly corrected, and the use of the word 'complaint' in an investigator's evidence summary did not demonstrate bias.

The motion was dismissed.

The applicants, Techocan International Co. Ltd. and Haiyan (Helen) Gao Jordan, applied under section 144 of the Securities Act to vary a settlement agreement they had entered into with Staff of the Ontario Securities Commission.

They argued that a subsequent settlement between Staff and co-respondents in the same proceeding resulted in a gross and unjustified disparity in sanctions, as the co-respondents faced no monetary penalties and minimal costs.

The Commission dismissed the application, finding that the two settlements were based on different facts, admitted contraventions, and individual circumstances.

The Commission held that absent exceptional and compelling circumstances, such as a subsequent finding that the admitted conduct was lawful, it would be prejudicial to the public interest to allow a party to resile from a settlement agreement based on a co-respondent's later, more favourable settlement.

The Ontario Securities Commission held a hearing to consider a settlement agreement between Staff and the respondents regarding unregistered trading, illegal distribution, and fraud.

The respondents raised approximately $5.4 million from investors through promissory notes without being registered or filing a prospectus.

They also engaged in deceitful conduct by paying distributions from new investors' funds and misrepresenting the funds' performance.

The panel approved the settlement agreement, noting the respondents' admission of breaching Ontario securities law, their commitment to repay harmed investors, and the inclusion of oversight mechanisms.

Multiple groups of investors and the respondents brought motions before the Ontario Securities Commission seeking to revoke Freeze Directions, allocate disgorged funds to specific investors, and facilitate the sale of frozen real property.

The respondents also sought to vary the disgorgement amount or set aside the previously approved settlement agreement.

The Commission dismissed the motions, holding that it lacks adjudicative jurisdiction to order restitution to individual investors or to vary an approved settlement agreement.

The Commission noted that the allocation of disgorged funds is an administrative function and directed Staff to apply to the Superior Court of Justice for directions on distributing the frozen funds and facilitating the sale of the real estate.

The Applicants, two registered dealers under common ownership, requested a hearing and review of a Director's Decision that imposed terms and conditions on their registrations due to a long history of compliance deficiencies.

The Ontario Securities Commission found that the Applicants had failed to comply with Ontario securities law in numerous respects over a period of years, including inadequate governance, failure to instill a culture of compliance, inadequate compliance resources, and recurring deficiencies.

The Commission confirmed the Director's Decision and ordered that each firm retain an independent consultant to review and improve their compliance systems.

The Ontario Securities Commission held a sanctions and costs hearing following a merits decision that found the respondents engaged in unregistered trading, illegal distribution of securities, and fraud.

The respondents raised approximately $1.7 million from investors through the sale of shares in PlusPetro Inc. and misappropriated the funds for personal use.

The Commission ordered permanent market bans against all respondents, with a limited carve-out for the individual respondents to trade in personal registered accounts once all monetary sanctions are paid.

The respondents were ordered to disgorge $1.7 million on a joint and several basis.

Administrative penalties of $500,000 and $150,000 were imposed on the individual respondents.

The respondents were also ordered to pay $309,812.56 in costs.

Staff of the Ontario Securities Commission alleged that the respondents engaged in unregistered trading, illegal distribution of securities, and fraud in connection with the sale of shares in PlusPetro Inc. The respondents admitted to trading without registration or a prospectus, and to making prohibited representations about future listings.

Following a merits hearing, the Commission found that the respondents also engaged in fraud by making misleading statements to investors about the company's business prospects and by misappropriating investor funds for personal expenses.

The sole director of the corporate respondent was deemed to have authorized, permitted, or acquiesced in the non-compliance.

Following earlier reasons dismissing most applicants’ requests for interim advancement of legal expenses from a corporation, the court addressed the costs of the applications.

The respondent corporation sought substantial indemnity costs exceeding $559,000 or alternatively partial indemnity costs, while the applicants argued that costs should remain in the cause of the underlying indemnity issue.

The court held that although the respondent was largely successful, payment of costs should be contingent on the outcome of the trial determining entitlement to indemnity.

The court fixed partial indemnity costs of $25,000 for a related motion and $165,000 for the applications, subject to specific allocations among applicants and exceptions for one successful applicant and another who withdrew participation.

Following a nine‑day trial concerning whether corporate decisions favouring a chief executive officer were protected by the business judgment rule and whether the executive was entitled to severance benefits, the court found that the executive breached fiduciary duties but remained entitled to severance under his employment arrangements, subject to recalculation excluding benefits arising from the breach.

Both sides claimed substantial success and sought significant costs awards, including requests for substantial indemnity costs based on abandoned allegations and trial outcomes.

The court held that the litigation involved two principal issues—fiduciary breach and entitlement to severance—and each party succeeded on one of them.

Because success was effectively divided and no settlement offers were made, the court determined that neither party should recover costs.

The appellants and respondents were involved in a long-standing boundary dispute concerning islands in Lake Huron.

The appellants reached a settlement with one of the defendants and sought to enforce it through consent orders.

The motion judge refused to grant the declarations contemplated by the settlement, finding they could affect the rights of the other defendants in the broader litigation.

The Court of Appeal upheld this decision, confirming that while the settling parties could resolve issues between themselves, they could not do so in a way that affected the other parties.

The appeal was dismissed, though some costs awards from the application were reduced.

Former directors, officers, and consultants of Look Communications Inc. sought interim advancement of their legal fees to defend against an action brought by Look alleging breach of fiduciary duty regarding bonus and equity cancellation payments.

The court held that s. 124(4) of the CBCA applies to actions brought directly by the corporation, requiring court approval for advancement.

The court found Look established a strong prima facie case of mala fides against the directors and officers, rebutting the presumption of good faith.

Advancement was denied for all applicants except one employee, Dolgonos, whose entitlement arose under an indemnity agreement not subject to s. 124(4).

The appellant appealed an order striking portions of its statement of claim and restricting leave to amend.

On consent, the order was amended to preserve a misrepresentation claim against two defendants.

The Court of Appeal also narrowed a restriction on amending the claim, holding that the appellant was only precluded from pleading facts that would amount to a collateral attack on a prior approval decision, rather than all facts known prior to that decision.

The appeal was otherwise dismissed, upholding the motion judge's decisions to strike references to settlement discussions and to refuse leave to amend an oppression claim.

The appellant appealed a decision dismissing his application to require Goldcorp Inc. to obtain shareholder approval for a transaction with Glamis Gold Ltd. The appellant argued the transaction was an 'arrangement' under s. 182 of the Business Corporations Act.

The Divisional Court dismissed the appeal, upholding the application judge's finding that s. 182 is facilitative, not mandatory, and that Goldcorp did not 'propose' an arrangement.

The court found the transaction was an issuance of shares and a vertical short-form amalgamation exempt from shareholder approval.

The respondents brought a motion to dismiss the proceeding against them on the basis that it was commenced outside the six-year limitation period under section 129.1 of the Securities Act.

Staff alleged a course of conduct involving unregistered trading and illegal distributions that culminated in sales to broker dealers prior to the limitation date, but argued that subsequent receipt of proceeds and certain private share transfers brought the conduct within the limitation period.

The Commission held that the subsequent events were not integral to the alleged wrongdoing and that the Statement of Allegations contained no separate allegations of wrongdoing for events after the limitation date.

The motion was granted and the proceeding dismissed.

The appellants, a real estate agent and broker, appealed a motion judge's decision striking out their statement of claim against the respondents for failing to disclose a reasonable cause of action.

The Court of Appeal allowed the appeal in part, finding that while the claim for fraudulent misrepresentation could not succeed, the appellants should be permitted to proceed to trial on the claim that the respondents wrongfully terminated a contract, depriving them of the opportunity to earn a commission.

The Court also held that section 23(a) of the Real Estate and Business Brokers Act did not bar the claim, as it was for loss of opportunity rather than a direct claim for a commission.

Commercial appeal arising from a manufacturing contract dispute over delayed and deficient mold production for an automotive supply program.

The appellant argued that the respondent's transfer of one mold to another subcontractor constituted accord and satisfaction and challenged the reasonableness of the respondent's mitigation costs.

The court rejected those arguments, holding that there was no agreement discharging the appellant's original obligations and that subcontracting completion was a necessary mitigation step in light of the delivery pressures imposed by the end customer.

The appeal was allowed only in part to correct the accounting by crediting the appellant with the unpaid final one-third contract amount for the transferred mold.

The respondent remained substantially successful and was awarded three-quarters of its appeal costs.