2 total
Appeal dismissed; Commission's finding that tax planning contracts constituted securities and resulting sanctions were reasonable.
The appellants appealed a merits decision and a sanctions decision of the Ontario Securities Commission.
The Commission had found that a set of contracts marketed as a tax planning vehicle constituted an 'investment contract' and therefore a 'security' under the Securities Act.
The Commission concluded that the appellants breached the Act by selling these securities without being registered and without filing a prospectus, imposing trading bans, administrative penalties, and costs.
The Divisional Court applied a reasonableness standard of review and dismissed the appeal, finding that the Commission's application of the test for an investment contract was reasonable and that the sanctions imposed were proportionate and justified.
Plaintiffs awarded $195,000 in partial indemnity costs, payable solely by the employer investment firm.
Following a trial where the plaintiffs were awarded $134,000 in damages against their investment advisors for negligence, the court determined the appropriate costs award.
The court found that the plaintiffs' subsequent settlement correspondence did not constitute valid Rule 49 offers, meaning they were only entitled to partial indemnity costs.
Applying the principle of proportionality, the court fixed the plaintiffs' costs at $195,000.
The court further held that the individual employee defendants, while proper parties, were not necessary parties, and therefore ordered the employer to bear the sole responsibility for paying the plaintiffs' costs, declining to make any costs orders against or in favour of the individual employees.
