Jay Naster

The applicants, charged with fraud and conspiracy to commit fraud in relation to a bid-rigging scheme, brought an application for the disclosure or third-party production of investigative files held by counsel for cooperating witnesses.

The cooperating witnesses had received immunity or leniency under the Competition Bureau's programs.

The applicants argued that the witnesses' lawyers acted as state agents when interviewing their clients and that solicitor-client privilege over those interview notes was waived.

The Superior Court of Justice dismissed the application, finding that the lawyers were not acting as state agents, the communications remained protected by solicitor-client privilege, and the privilege was never waived.

Consequently, the materials were not within the Crown's control for Stinchcombe disclosure and could not be produced as third-party records.

The applicants sought to quash charges of fraud on the public and conspiracy to defraud the public, arguing that the evidence identified 38 specific corporate victims, thus requiring individual naming in the indictment.

The Crown contended that the charges were properly framed against the public due to the impossibility of identifying all victims (e.g., individual condominium owners affected by increased fees) and the broad interpretation of "public" in the Criminal Code.

The court dismissed the application, finding that the charges were appropriately framed as offenses against the public, consistent with recent jurisprudence where a segment of the community or a regulated industry can constitute "the public" and where a ripple effect on unidentifiable parties exists.

The appellant appealed a decision of the Ontario Securities Commission (OSC) that dismissed a review of two decisions by the Investment Industry Regulatory Organization of Canada (IIROC).

IIROC had found the appellant liable for improperly altering client documents after they were signed, imposing a 12-month suspension, close supervision, and fines.

The Divisional Court dismissed the appeal, finding that the OSC applied the correct standard of review and made no palpable and overriding errors in upholding IIROC's findings of fact and sanctions.

This endorsement addresses two motions in a complex litigation involving allegations of misappropriation of confidential information and trademark infringement.

The first motion, brought by the plaintiffs, sought further document production from the defendants and leave to amend the claim.

The second motion, brought by certain defendants, sought forensic examination of specific electronic documents and production of network access records from the plaintiffs, and also proposed bifurcation of a key issue.

The court ordered reciprocal production of relevant confidential business documents under a protective order, denied bifurcation due to lack of consent, ordered the plaintiffs to undertake a forensic search for disputed electronic documents and produce network access records, and largely granted the motion to amend the claim, with the exception of a plea to pierce the corporate veil.

The applicants sought judicial review to quash a condition attached to their liquor and cannabis licences that prohibited the former owner from being employed in any capacity.

The Registrar imposed the condition under the Risk Based Licensing regime without disclosing the underlying risk assessment summary or providing particulars of the alleged infractions.

The Divisional Court allowed the application, finding that the Registrar breached the duty of procedural fairness by failing to provide adequate notice and disclosure, which prevented the applicants from knowing the case they had to meet.

The decisions were quashed and remitted for reconsideration.

The applicant sought a hearing and review of IIROC merits and sanctions decisions which found he inappropriately altered signed client documents and suspended his registration for 12 months.

The applicant argued the IIROC Panel erred by admitting unalleged misconduct, reversing the onus of proof, making improper inferences from circumstantial evidence, and imposing excessive sanctions.

The Ontario Securities Commission dismissed the application, finding the IIROC Panel's decisions were reasonable, applied the correct onus of proof, and appropriately relied on both direct and circumstantial evidence.

The appellant childcare centre brought a costs application following a successful appeal against the Director's proposal to refuse to renew its licence.

The appellant argued the Director acted unreasonably and in bad faith, citing late disclosure, destruction of notes, and reliance on unproven grounds.

The Tribunal found no bad faith but concluded the Director's conduct was unreasonable, specifically regarding the late disclosure of relevant information and the destruction of inspection notes by Program Advisors.

The Tribunal awarded the appellant $2,750 in costs.

The offender pleaded guilty to contravening Ontario Securities law by acting as a general manager of a transfer agency while subject to a prohibition order.

The Crown sought a fine and probation, while the defence sought a suspended sentence and probation.

The court found that the offender's conduct was a mistake of law, openly disclosed, and resulted in no financial loss to anyone.

Considering the offender's severe financial hardship, remorse, and a suicide attempt upon learning of the investigation, the court applied the principles of proportionality and restraint, concluding that a fine would be unfit.

A suspended sentence with two years of probation was imposed.

The applicant, a registered representative, sought a stay of two IIROC decisions that suspended his registration for 12 months for inappropriately altering client documents.

The Commission applied the three-part RJR-MacDonald test and granted the stay pending the disposition of his application for hearing and review.

The Commission found that the review application raised serious issues, the applicant would suffer irreparable financial and reputational harm without a stay, and the balance of convenience favoured a stay given the low risk of client harm and the imposition of close supervision conditions.

The appellants appealed the Ontario Securities Commission's findings that they engaged in fraudulent conduct in connection with three distributions of securities and the resulting sanctions.

The Divisional Court applied the appellate standard of review from Vavilov, finding no palpable and overriding errors of fact, no errors of mixed fact and law, and no denial of procedural fairness.

The Commission's reasons were adequate and the sanctions, including permanent bans, administrative penalties, and disgorgement orders, were reasonable and supported by the evidence.

The appeal was dismissed.

The Crown applied for an order to retain seized material for an additional year in a complex criminal investigation involving Fortress Real Capital Inc. and related entities.

The investigation, initiated in 2018, concerned allegations of investor fraud through misrepresentation of property values and investment eligibility.

The court granted the application, finding the investigation to be complex due to the large volume of electronic and hard copy material, the need for professional assistance (computer experts, accountants), and significant delays caused by extensive solicitor-client privilege claims over seized documents.

The court emphasized that while asserting privilege is legitimate, it contributed to the complexity and delay, justifying further detention of the material until June 22, 2021.

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 applicant sought an order compelling the respondent to comply with a Divisional Court order to call a shareholders' meeting with a specific record date (October 24, 2016).

The respondent faced difficulties with its transfer agent, Computershare, in generating an omnibus proxy for the specified record date, citing standard securities communication requirements (National Instrument 54-101) and the need for a new record date.

The court clarified its jurisdiction, emphasizing that the Divisional Court had already set the record date as a fundamental element of its order.

The court found that technical compliance mechanisms like NI 54-101 and s. 95(4) of the Business Corporations Act could be overridden by court orders under s. 106 of the OBCA to achieve justice.

The court ordered a customized approach, authorizing the use of a specific report for shareholder identification and directing intermediaries to transmit meeting materials and voting preferences based on the original record date, regardless of subsequent share transfers.

The appellant, holding 42% of the respondent corporation's shares, requisitioned a shareholders' meeting to remove certain directors.

The board rejected the requisition, claiming it was primarily to redress a personal grievance under s. 99(5)(b) of the Business Corporations Act.

The application judge agreed and dismissed the appellant's application to validate the requisition.

On appeal, the Divisional Court found the application judge erred by reversing the onus and conflating personal interests with personal grievances.

The court held the dispute involved legitimate differences over corporate policy and operations, not merely personal grievances.

The appeal was allowed, and the respondent was ordered to call the meeting.

The applicant, the largest shareholder of the respondent corporation, requisitioned a shareholders meeting to remove certain directors.

The board refused to call the meeting, citing the personal grievance exception under the Business Corporations Act.

The applicant sought a declaration that the requisition was valid.

The court found that the applicant's primary purpose was to redress a personal grievance rather than to address corporate policy or operations, as his actions were motivated by personal interests and a perceived lack of respect.

The application was dismissed.

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 defendants were charged with creating an unauthorized security interest in a credit union contrary to the Credit Unions and Caisses Populaires Act.

They brought a motion to quash the Information, arguing it was laid outside the two-year statutory limitation period.

The court found that the regulatory agency had knowledge of the material facts more than three years before the charge was laid, and that the failure to share this information with the Superintendent in a timely manner frustrated the limitation period.

The motion was granted, the Information was quashed, and the charges were dismissed.

The respondent corporation pleaded guilty to criminal negligence causing death after a swing stage collapsed at a construction site, killing four workers.

The sentencing judge imposed a fine of $200,000, relying on the range of fines under the Occupational Health and Safety Act and the corporation's ability to pay.

The Crown appealed the sentence.

The Court of Appeal allowed the appeal, holding that the sentencing judge erred by relying on regulatory fine ranges that do not reflect the higher moral blameworthiness of criminal negligence, and by treating the corporation's ability to pay as a statutory prerequisite.

The Court increased the fine to $750,000 to properly reflect the gravity of the offence and the principles of denunciation and deterrence.

The applicant corporation sought orders under the Securities Act and the Business Corporations Act to restrict certain shareholders from voting shares allegedly acquired in breach of early warning reporting requirements, to declare that a shareholder rights plan “flip‑in event” had occurred, and to invalidate a dissident proxy solicitation ahead of an annual general meeting.

The court declined to address the alleged early warning breach because the matter was already the subject of an ongoing Ontario Securities Commission investigation and had previously been withdrawn from related litigation.

Even if a breach had occurred, the court held that the discretionary remedy of prohibiting voting rights would not be appropriate given the circumstances and absence of harm to the market or shareholders.

The court also found no evidence that the respondents acted jointly or in concert in organizing the proxy solicitation or that the circular was misleading under applicable securities and corporate law regulations.

The application was dismissed.

The defendant, a director of a construction company, pleaded guilty to four counts of failing to take all reasonable care to ensure compliance with occupational health and safety regulations.

The charges arose from a catastrophic incident on December 24, 2009, when a suspended work platform collapsed during balcony repair work on two Toronto buildings, resulting in four deaths and one serious injury.

The defendant failed to ensure non-English-speaking workers received written safety instructions in their native languages, failed to maintain required training records, allowed defective equipment to be used without proper documentation, and failed to prevent overloading of the work platform.

The court imposed fines of $22,500 per count with a 25% victim fine surcharge, payable over 12 months.