James D.G. Douglas

IIROC Staff applied for a hearing and review of an IIROC Hearing Panel decision that dismissed allegations against TD Securities Inc. (TDSI) for failing to comply with its trading supervision obligations.

The IIROC Hearing Panel had found that several TDSI traders entered artificial closing bids but concluded that TDSI's supervisory system was adequate.

On review, the Ontario Securities Commission found that the IIROC Hearing Panel did not overlook or misapprehend material evidence, nor did it err in law or proceed on an incorrect principle.

The Commission deferred to the IIROC Hearing Panel's factual determinations and its assessment of the adequacy of TDSI's multi-tiered supervisory system.

The application was dismissed.

The plaintiffs brought a proposed class action against mutual fund managers for permitting market timing, which allegedly caused losses to long-term investors.

The defendants had previously entered into settlement agreements with the Ontario Securities Commission (OSC) regarding the same conduct.

The motion judge dismissed the certification motion, finding the OSC proceedings were the preferable procedure.

The Divisional Court allowed the plaintiffs' appeal.

The Court of Appeal dismissed the defendants' appeal, holding that the OSC proceedings were regulatory and lacked participatory rights for investors, and therefore did not fulfill the access to justice goals of the Class Proceedings Act.

The class action was deemed the preferable procedure.

The corporation sought an order approving a proposed arrangement to collapse its dual-class share structure by purchasing for cancellation all outstanding Class B shares for consideration comprising 9 million newly issued Class A shares and US$300 million in cash.

The application judge approved the arrangement.

The opposing shareholders appealed, arguing the application judge erred in finding the arrangement fair and reasonable.

The Divisional Court dismissed the appeal, holding that the application judge correctly applied the BCE test.

The corporation was not required to demonstrate with certainty that the benefits of the arrangement would offset the costs, but only a reasonable prospect of clearly identified benefits.

The affirmative vote of the Class A shareholders was important evidence supporting the fairness of the arrangement.

Staff of the Ontario Securities Commission brought a hearing under section 127 of the Securities Act regarding Magna International Inc.'s proposed plan of arrangement to collapse its multiple voting share structure.

Staff alleged the management information circular lacked sufficient information and the transaction was contrary to the public interest.

The Commission found the proposed transaction was not abusive, but concluded the circular failed to provide shareholders with sufficient disclosure to make an informed decision, particularly given the lack of a board recommendation and the transaction's nature as a related party transaction.

The Commission ordered that the circular be amended to include specific material information, including financial analysis and alternatives considered by the special committee, before the shareholder vote could proceed.

The Ontario Energy Board (OEB) imposed a condition on Toronto Hydro-Electric System Limited (THESL) requiring approval from a majority of its independent directors before declaring future dividends to its affiliates, due to concerns over large dividend payouts amidst aging infrastructure.

The Divisional Court struck down this condition, finding the OEB exceeded its jurisdiction.

The OEB appealed.

The Court of Appeal allowed the appeal, holding that the OEB's broad rate-setting powers under the Ontario Energy Board Act included the jurisdiction to impose such a condition to protect ratepayers.

The Court found the OEB's decision was reasonable and did not improperly usurp corporate law principles, as it merely added a regulatory check to the directors' discretion.

The Independent Financial Brokers of Canada (IFBC) applied for a review of the Ontario Securities Commission's decision to approve an amendment to a Mutual Fund Dealers Association (MFDA) by-law.

The MFDA and Commission Staff challenged the panel's jurisdiction and the IFBC's standing.

The hearing panel dismissed the application, finding it lacked jurisdiction under sections 21.7, 21.1(4), and 144 of the Securities Act to review a policy decision made by the Commission as a whole.

Furthermore, the panel held that the IFBC, as an industry lobby group, was not 'directly affected' or 'affected' by the by-law approval, and therefore lacked standing to bring the application.

Toronto Hydro-Electric System Ltd. appealed a decision of the Ontario Energy Board that required any dividend paid by the utility to its parent company be approved by a majority of its independent directors.

The Divisional Court allowed the appeal, finding that the Board lacked both express and implied jurisdiction under the Ontario Energy Board Act, 1998 to impose restrictions on the corporate process for declaring dividends.

The condition was found to be an unwarranted intrusion into corporate governance and contrary to established corporate law principles.

The appellant appealed a Superior Court decision that held a perpetual right to renew a supply of 5000 horsepower of electricity at a preferential rate remained extant.

The Court of Appeal allowed the appeal, finding that the appeal judge failed to give adequate weight to the fact that the original 1928 agreement lapsed in 1987 due to the respondent's failure to give the required renewal notice.

The Court held that subsequent agreements did not revive the perpetual renewal provision, but merely provided a preferential price for a fixed term.

The plaintiffs sought leave to appeal a motion judge's dismissal of their motion to enforce a settlement under Rule 49.09.

The motion judge had found he could not determine whether a settlement had been reached.

The Divisional Court dismissed the application for leave to appeal, finding no conflicting decisions on the application of Rule 49.09 and no good reason to doubt the correctness of the motion judge's decision, as he properly applied a Rule 20 summary judgment approach to the first step of the settlement enforcement analysis.

The appellant hospital appealed an order declaring that the respondent and other 'Annual Members' held their memberships for a full 12-month period and compelling the hospital to hold a requisitioned special meeting.

The hospital argued that under its by-laws, annual memberships expired on July 31 regardless of when they were approved, which in practice resulted in terms of only a few months.

The Divisional Court dismissed the appeal, finding no palpable and overriding error in the motion judge's conclusion that the hospital's interpretation was unreasonable and unfair, and that 'annual' should be given its plain meaning of a full 12-month term to ensure members could effectively act as a check on the board of directors.

The appellants moved under Rule 49.09 for judgment in the terms of an alleged settlement agreement.

The motion judge dismissed the motion, stating that he could not determine on the affidavit evidence whether a binding settlement had been reached, but concluded by stating the proceeding would continue as if there had been no accepted offer.

The appellants appealed to the Court of Appeal.

The Court of Appeal quashed the appeal, holding that the motion judge's order was interlocutory because he did not make a final determination that no settlement existed, but rather found he could not decide the issue on the record before him.

As the order was interlocutory, the Court of Appeal lacked jurisdiction.

The appellants, a stockbroker and two brokerage firms, appealed a trial judgment finding them liable for negligence and breach of contract resulting in the respondents' investment losses.

The trial judge found the broker engaged in unauthorized trading and the firms failed to supervise him or warn the clients.

The respondents cross-appealed the dismissal of their claims for loss of opportunity and punitive damages.

The Court of Appeal dismissed both the appeal and the cross-appeal, upholding the trial judge's findings on liability, apportionment, mitigation, and costs.

The applicant employer sought a hearing before the Financial Services Tribunal regarding the Superintendent's proposal to refuse approval of a partial wind-up report for a pension plan.

The report failed to provide for special early retirement pensions under section 7.3 of the plan.

The Tribunal found that the special early retirement pension was an 'ancillary benefit' under the Pension Benefits Act, and that the employer's consent required by the plan was deemed to be given upon partial wind-up pursuant to subsection 74(7) of the Act.

The Tribunal directed the Superintendent to carry out the proposal to refuse approval of the report.

The complainants, dependent contractor owner-operators, alleged that their union breached its duty of fair representation under section 68 of the Labour Relations Act.

Facing a severe economic downturn and shrinking work volume, a majority of the bargaining unit voted to re-open the collective agreement to replace a work-sharing (no-layoff) provision with a provision allowing layoffs by reverse order of seniority.

This resulted in the layoff of the complainants.

The Board dismissed the complaint, finding that the union's decision to abandon work-sharing in favour of seniority-based layoffs was objectively justified by the deteriorating economic conditions and was not arbitrary, discriminatory, or in bad faith.