Kate McGrann

The applicants sought an order to enforce Letters Rogatory issued by a New York Court in a U.S. securities class action, compelling production of documents from the respondent, a non-party Ontario corporation.

The respondent opposed the application, arguing the requests were overly broad, irrelevant, and unduly burdensome.

The court applied the Friction Division guideposts and granted the application on a narrowed basis, restricting the temporal scope of the production and establishing a staged process to manage the costs and burden of electronic document review.

Staff of the Ontario Securities Commission alleged that Cronos Group Inc. improperly recognized revenue and overstated its U.S. goodwill and intangible assets, and that its former Chief Financial Officer failed to take appropriate steps to address revenue recognition issues.

The respondents admitted to the misconduct and entered into settlement agreements with Staff.

The Capital Markets Tribunal approved the settlements, finding that the agreed sanctions, including administrative penalties, costs, and an independent review of internal controls, were in the public interest and achieved specific and general deterrence.

Following a merits decision finding that the Respondents illegally distributed securities, engaged in unregistered trading, and committed fraud, the Commission held a sanctions and costs hearing.

The Commission found the misconduct to be egregious, involving the loss of virtually all investor funds and a callous disregard for investors' interests.

The Commission ordered permanent market bans against the Respondents, joint and several disgorgement of C$1.45 million and US$140,000, an administrative penalty of $550,000 against the individual Respondent, and costs of $275,138.62 apportioned between the Respondents.

Staff of the Ontario Securities Commission alleged that Dennis Meharchand and Valt.X Holdings Inc. illegally distributed securities, engaged in unregistered trading, and committed fraud.

The Commission found that the respondents distributed common shares, convertible notes, and investment contracts without a prospectus or an available exemption.

The respondents also engaged in the business of trading securities without being registered.

Furthermore, Mr. Meharchand committed fraud by making false statements to investors about the use of funds and by using investor funds for improper personal purposes, including gambling.

The Commission concluded that the respondents breached the Securities Act and directed a hearing regarding sanctions and costs.

Aurora Cannabis Inc. launched a hostile take-over bid for CanniMed Therapeutics Inc., conditional on CanniMed abandoning its proposed acquisition of Newstrike Resources Ltd. Aurora applied to the Ontario Securities Commission and the Financial and Consumer Affairs Authority of Saskatchewan for exemptive relief to shorten the 105-day minimum deposit period for its bid and to cease-trade CanniMed's newly adopted shareholder rights plan.

CanniMed and its Special Committee brought cross-applications seeking to prohibit Aurora from using the 5% exemption for market purchases and to declare Aurora and certain locked-up shareholders as joint actors.

The panels held a joint hearing and determined that the 105-day minimum deposit period should not be shortened, as the Newstrike transaction was not an alternative transaction that extinguished shareholder interests.

The panels declined to prohibit Aurora from using the 5% exemption and found insufficient evidence that Aurora and the locked-up shareholders were acting jointly or in concert.

However, the panels found that Aurora had received material non-public information about CanniMed's acquisition plans, giving it a tactical advantage, and ordered Aurora to amend its take-over bid circular and news releases to disclose these circumstances.

Finally, the panels cease-traded CanniMed's shareholder rights plan, finding it to be an impermissible defensive tactic that interfered with the established take-over bid regime.

The law firm Crawley MacKewn Brush LLP (CMB) brought a motion seeking an order to be appointed as representative counsel for approximately 3,000 investors in the receivership of Crystal Wealth Management Systems Inc. The court-appointed Receiver, Grant Thornton Limited, and the Ontario Securities Commission opposed the motion, arguing that it would be duplicative of the Receiver's role and would result in unnecessary professional fees.

The court dismissed CMB's motion, finding that the Receiver was already adequately protecting and advancing the investors' interests, and that appointing representative counsel would add unnecessary expense without good reason.

The applicant sought leave to appeal an arbitral award finding it breached contractual and fiduciary duties by failing to redeem the respondent's hedge fund investment.

The arbitrator awarded $1.3 million in damages, rejecting the applicant's argument that damages should be assessed based on an alternative, less onerous method of performance.

The Superior Court denied leave to appeal, finding that the arbitrator correctly interpreted the contract as mandating only one method of performance and that the applicant's challenges raised issues of mixed fact and law, not extricable questions of law.

The plaintiff brought a motion for summary judgment against the defendants, a TD mobile mortgage manager and TD Bank, for negligent misrepresentation regarding a $120,000 investment in a debenture.

The plaintiff claimed the manager assured him the investment was safe and that he assumed TD was involved.

The court found that the manager's statements were honest opinions given "friend to friend" based on personal experience, and did not constitute negligent misrepresentation.

The court also found no reasonable basis for the plaintiff to assume TD was involved, dismissing the vicarious liability claim against TD.

Furthermore, the court held the claim was statute-barred under the Limitations Act.

The motion for summary judgment was dismissed, and the claims against the manager and the vicarious liability claim against TD were dismissed.

In a group of related civil proceedings involving multiple plaintiffs and the same defendants, the court considered a request concerning the deadline for filing third party claims.

Following a prior order, the parties jointly sought an extension of time to file all third party claims.

The court granted the request on consent and extended the deadline to September 25, 2015.

The endorsement reflects a procedural timetable adjustment rather than a substantive determination of the underlying claims.

The appellants appealed a trial judgment dismissing their claims for oppression and civil conspiracy against the respondents.

The appellants alleged the respondents unlawfully provided their share ownership information to a third party, leading to an injunction that froze their shares.

The Court of Appeal upheld the trial judge's findings that the respondents' conduct was not oppressive, there was no intent to injure to support a conspiracy claim, and the appellants suffered no damages because they had consented to the injunction.

The appeal was dismissed with costs.

The appellant challenged summary judgment enforcing a disciplinary costs award made by a securities self-regulatory organization after professional misconduct proceedings.

The issue was whether the organization could sue a former member in breach of contract to recover the unpaid costs award, and whether s. 9 of the Recognition Order barred that remedy by treating costs like fines or settlements.

The court held that prior authority recognizing contractual enforcement of disciplinary sanctions applied equally to costs awards, and that the plain wording of s. 9 was limited to fines and settlements.

The appeal was dismissed and appeal costs were awarded to the respondent.

The Respondents in a securities fraud proceeding brought a motion seeking disclosure of certain internal documents from Commission Staff, including drafts, internal commentary, and documents evidencing Staff's decision to commence proceedings.

The Commission applied the Stinchcombe standard of disclosure, requiring Staff to disclose all relevant information gathered during the investigation.

However, the Commission dismissed the motion with respect to internally-generated documents evidencing Staff's analysis, commentary, or opinions (Staff work product), finding them irrelevant to the issues to be decided at the merits hearing.

The motion was allowed in part for documents gathered during the investigation and communications between Staff and the Respondents, subject to privilege.

The plaintiff sought an interim injunction restraining an anonymous online poster from publishing defamatory statements on an internet message board about the plaintiff, the CEO of a publicly traded company.

The impugned posts alleged fraud, stock manipulation, offshore accounts, and other misconduct.

The court found the statements were manifestly defamatory, unsupported by any justification, and likely to cause irreparable harm given the wide dissemination and permanence of internet publications.

The court held that Ontario had jurisdiction because the alleged defamation caused reputational harm in the province.

An interim injunction was granted restraining the defendant from publishing further defamatory statements.