John Anthony Fabello

The plaintiffs brought a motion for approval of an $8,000,000 settlement in three related securities class actions against a cannabis company and its directors, officers, and underwriters.

The claims alleged misrepresentations regarding the company's business and the build-out of its production facility.

The court approved the settlement, finding it fair, reasonable, and in the best interests of the class.

The court also approved class counsel fees of 30% of the settlement amount ($2,400,000) and honoraria of $5,000 for each of the four representative plaintiffs.

The plaintiffs in three related proposed class actions sought leave to proceed under the Securities Act, certification under the Class Proceedings Act for settlement purposes, and approval of a Notice of Settlement Approval Hearing.

The actions alleged misrepresentations by a cannabis company regarding its facility expansion.

The court found the certification criteria were met for settlement purposes, granted leave to proceed under the Securities Act, and approved the form and dissemination plan for the settlement notice.

The plaintiff brought a motion for leave to commence a secondary market securities class action under Part XXIII.1 of the Securities Act against Akumin Inc., its directors and officers, and its auditor, Ernst & Young LLP, and for certification of the action under the Class Proceedings Act.

The claims arose from alleged misrepresentations in Akumin's financial statements that were later restated.

The court granted leave against the Akumin defendants, finding a reasonable possibility of success at trial regarding the alleged misrepresentations and public corrections.

However, the court denied leave against the auditor, EY, finding insufficient evidence that the auditor's statements were material or publicly corrected.

The court certified the action as a global class proceeding against the Akumin defendants, rejecting arguments to exclude American purchasers from the class.

The moving parties brought a motion for leave to appeal the decision of S.T. Bale J. dated September 2, 2023.

The Divisional Court dismissed the motion for leave to appeal and awarded costs to the respondents fixed at $5,000 all inclusive.

This is an appeal from a motion judge's decision dismissing the plaintiffs' motion to amend their pleadings in a class action alleging a multi-bank conspiracy to fix gold and silver prices and engage in 'spoofing'.

The motion judge had found the proposed amendments time-barred or improper for joinder.

The Court of Appeal allowed the appeal, finding that the motion judge erred in law by treating amendments as new causes of action when they were alternative theories based on existing facts, and by misapplying the 'actual knowledge' standard for limitation periods.

The Court also found a palpable and overriding error in the motion judge's assessment of JP Morgan's joinder, concluding that the CFTC order did not preclude conspiratorial spoofing allegations.

The amendments were allowed, with the possibility for some respondents to plead a limitations defence at trial.

The defendants brought a motion for leave to appeal the order of Morgan J. dated August 15, 2022.

The Divisional Court granted the motion for leave to appeal.

On agreement of the parties, costs of the motion were awarded to the moving parties in the amount of $7,000 inclusive.

The plaintiffs, trustees of a pension fund, commenced a class action in Ontario and a similar one in Federal Court.

Settlements were reached with some defendants in the Federal Court action.

The plaintiffs sought court approval to discontinue the Ontario action, with prejudice and without costs, in favour of the Federal Court proceedings.

The court granted the motion, finding no prejudice to putative class members as their claims would continue in the Federal Court, and that discontinuing the Ontario action would avoid a multiplicity of proceedings.

Following a successful appeal that dismissed the plaintiffs' action against the moving defendants, the issue of costs for four summary judgment motions was returned to the motion judge.

The moving defendants sought substantial indemnity costs, arguing the plaintiffs alleged fraud and failed to accept a walk-away offer.

The court rejected these arguments, finding no fraud was pleaded and the communication was not a formal offer to settle.

Applying the principle of reasonableness and noting duplication of effort among multiple defence counsel, the court awarded partial indemnity costs fixed at a total of $235,000.

The appellants, who were volunteer directors of corporations within the insolvent First Leaside group, appealed a motion judge's refusal to dismiss negligence and breach of fiduciary duty claims against them.

The plaintiffs, investors in the group, alleged the directors owed them a duty of care regarding the financial stewardship of the corporations.

The Divisional Court allowed the appeal and dismissed the actions against the appellants, holding that a director's duty of care is owed to the corporation, not to individual shareholders or investors, absent specific circumstances like fraud or independent tortious conduct, which were not pleaded.

The plaintiff sought to certify a class action against a mining corporation, its executives, and its underwriters for misrepresentations in a short form prospectus related to a secondary public offering.

The corporate defendants consented to certification of the statutory misrepresentation claims.

However, the underwriters opposed certification of the common law negligent misrepresentation and negligence claims against them.

The court certified the action against the corporate defendants but dismissed the certification motion against the underwriters, finding that a class proceeding was not the preferable procedure due to the inevitability of individual trials on reliance and damages, and that the negligence claim failed to disclose a reasonable cause of action as it was subsumed by the negligent misrepresentation claim and did not establish a novel duty of care.

Following summary judgment motions brought by nine defendants, which were largely dismissed but resulted in the narrowing of the plaintiffs' claims, the court determined the issue of costs.

The plaintiffs sought $182,725 on a partial indemnity basis, while the defendants sought $289,249.

The court found that the plaintiffs were generally successful as the actions were not dismissed, but granted the defendants a 25% credit ($72,000) for their partial success in narrowing the issues.

The plaintiffs were awarded net costs of $100,000.

The defendant, KPMG LLP, moved for an order relieving former directors of the plaintiff, Cash Store, from a contractual obligation not to cooperate with KPMG in the ongoing litigation.

This obligation was contained in an undisclosed side letter agreement that formed part of a global settlement under the CCAA.

The court found that because the side letter was not disclosed to creditors, KPMG, or the court during the CCAA plan approval process, Cash Store lacked the authority to enter into the impugned term.

Consequently, the court held that the prohibition against communicating with KPMG was not binding on the former directors, and the motion was granted.

The defendants (Underwriters) sought leave to appeal an interlocutory order that allowed the plaintiff to amend its claim to add the Underwriters as defendants in a class action and admitted the plaintiff's expert evidence.

The Divisional Court dismissed the motion for leave to appeal, finding no good reason to doubt the correctness of the motions judge's decision regarding the admissibility of the expert evidence and the finding that the Underwriters would not suffer non-compensable prejudice by being added as parties.

The plaintiff brought a motion to strike the defendants' reply factum filed on a motion for leave to appeal.

The Divisional Court held that under Rule 61.03.1(11), a reply factum is only permitted where a new issue is raised by the responding party, not merely to provide a different perspective or reinforce points already made.

Finding that the reply factum addressed issues central to the leave motion rather than new issues, the court ordered the reply factum struck from the record.

The plaintiff, LBP Holdings Ltd., brought a motion in a proposed securities class action to add the defendant's underwriters (Cormark Securities Inc. and Dundee Securities Limited) as party defendants following the original defendant's bankruptcy.

The plaintiff sought to assert five claims: primary market statutory, secondary market statutory, common law negligence, common law negligent misrepresentation, and unjust enrichment.

The court granted leave to add the underwriters for the common law negligence and negligent misrepresentation claims, finding them tenable.

However, the primary market statutory claim was time-barred, and the secondary market statutory claim was untenable as underwriters were not considered "experts" under Part XXIII.1 of the Securities Act.

The unjust enrichment claim was also dismissed as legally untenable due to a valid contractual basis for fees and the principle against shareholder derivative actions for corporate wrongs.

In this proposed securities class action arising from the collapse of a public issuer, the plaintiffs sought leave under Part XXIII.1 of the Securities Act and certification of claims on behalf of purchasers of notes and shares in the primary and secondary markets.

Subject to one contested issue concerning former noteholders who had assigned their notes during the class period, the motions were unopposed or proceeded on consent.

The court granted leave and certified the action, holding that the substantive dispute over whether assigned noteholder claims vested in transferees under New York law should be postponed until after certification.

The court found it procedurally preferable and fair to defer that merits issue until after a defence was delivered, thereby avoiding interlocutory delay in a large and complex class proceeding.

The moving parties (class action plaintiffs) brought a motion to quash appeals filed by the respondent objectors.

The court found that the appellants did not have a right of appeal under s. 30(3) of the Class Proceedings Act because they were not parties to the class proceeding.

Furthermore, they did not meet the requirements of s. 30(5) as they had not obtained leave to act as a representative party for an appeal from a judgment on common issues or an aggregate assessment.

The appeals were quashed and the motion to act as representative plaintiff was dismissed.

Invesco sought leave to appeal orders sanctioning a Plan of Compromise and Reorganization under the CCAA and approving a settlement that released Ernst & Young LLP from claims arising from its auditing of Sino-Forest Corporation.

The Court of Appeal denied leave, finding that the proposed appeals failed to meet the stringent test for leave in CCAA proceedings.

The appeal of the Sanction Order was moot, and the issues regarding the third-party release in the Settlement Order were governed by the court's prior decision in ATB Financial.

In CCAA restructuring proceedings, shareholder class action plaintiffs sought to limit the scope of a stay of proceedings so that certification, leave, and amendment motions in related Ontario and Quebec securities class actions could proceed against auditors, underwriters, and former directors.

The court applied the established test for lifting a CCAA stay, considering relative prejudice, balance of convenience, and the merits.

Given the pending appeal concerning whether shareholder claims constituted “equity claims” under the Companies’ Creditors Arrangement Act and the imminent creditor meeting regarding a proposed plan of arrangement, the court found that maintaining the stay temporarily would avoid prejudice and promote orderly proceedings.

The court held that the balance of convenience favoured maintaining the stay so that the auditors and underwriters could focus on the appeal and restructuring process.

The motion to limit the stay was dismissed without prejudice to renewal after the creditor meeting.

In CCAA proceedings, the applicant sought an order declaring that shareholder class action claims alleging losses from the purchase or sale of its securities constituted “equity claims” under s. 2 of the Companies’ Creditors Arrangement Act.

The applicant also sought a determination that indemnity and contribution claims advanced by auditors and underwriters in relation to those shareholder actions were likewise equity claims.

The court held that shareholder claims alleging losses from trading in the company’s securities fall squarely within the statutory definition of equity claims and are subordinated to creditor claims.

Indemnification and contribution claims arising from those shareholder actions were also characterized as equity claims because their nature derives from the underlying shareholder claims.

However, the court left open the possibility that claims for defence costs might not necessarily be equity claims depending on the outcome of the underlying litigation.