Kelley M. McKinnon

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.

The respondent sought costs following the dismissal of the Ontario Securities Commission's motion for leave to appeal under s. 131 of the Provincial Offences Act.

The Court of Appeal held that it lacked jurisdiction to award costs on the dismissal of such a motion.

Furthermore, the court noted that even if jurisdiction existed, the general rule in proceedings under the Act is that no costs are awarded against either party, and there were no circumstances justifying a departure from that rule.

The request for costs was denied.

The Ontario Securities Commission sought leave to appeal a Superior Court judgment that overturned the respondent's convictions for ten counts of tipping under the Securities Act.

The Superior Court had ordered a new trial based on the trial judge's inadequate assessment of the key witness's credibility and failure to consider each count independently.

The Court of Appeal refused leave to appeal, finding that the proposed grounds of appeal involved the application of well-established legal principles and did not raise questions of law essential in the public interest or for the due administration of justice as required by s. 131 of the Provincial Offences Act.

The appellant brought a motion before the Court of Appeal.

The court dismissed the motion and ordered no costs, as the responding party did not request them.

The appellant appealed decisions of the Ontario Securities Commission finding he acted as an unregistered adviser and imposing sanctions, including a $300,000 costs order, for failing to disclose conflicts of interest while recommending securities at investment seminars.

The Divisional Court applied the pragmatic and functional approach, determining the standard of review was reasonableness for the merits and public interest findings.

The court upheld the Commission's findings that the appellant was in the business of advising and that his failure to disclose conflicts was contrary to the public interest.

However, the court found the Commission's process for determining the $300,000 costs award was procedurally unfair and remitted the costs issue back to the Commission.