A former director and investor brought a motion for summary judgment alleging negligent misrepresentation by corporate directors, the chief financial officer, and an engineering consultant arising from a private placement investment that later became worthless after the corporation entered receivership.
The plaintiff alleged misrepresentations concerning reserve reports, a bank borrowing base notice, and the intended use of proceeds of the financing.
The court held that many alleged representations were made to the plaintiff in his capacity as a director rather than as an investor, raising significant duty of care issues and rendering reliance problematic.
The court also found genuine issues requiring a trial regarding whether misrepresentations occurred, whether they were negligent, and whether reliance was established.
In addition, most claims were found to be statute‑barred under the Limitations Act, 2002.
