Kent E. Thomson

Two competing groups of plaintiffs, KMG and RGG, brought class actions against Barrick Gold Corporation for securities misrepresentations related to environmental violations at a Chilean mine.

The motion judge granted carriage to RGG, finding their broader claims and superior state of preparation were in the best interests of the class.

KMG appealed the carriage order.

The Divisional Court dismissed the appeal, holding that the motion judge articulated the correct test, did not err in law or principle, and committed no palpable and overriding factual errors in his assessment of the carriage factors.

In a proposed class action concerning allegedly defective metal-on-metal hip implants, the defendants brought a motion for the pre-certification production of the representative plaintiff's medical records.

The court formulated a clear rule for Ontario that pre-certification production of medical records will only be ordered if the defendant can show the documentation is relevant to one or more of the certification requirements under section 5(1) of the Class Proceedings Act.

The court dismissed the defendants' broad request for all hip-related medical records as irrelevant to the certification issues, but granted a narrow request for records identifying the specific products implanted, as this was relevant to the plaintiff's suitability as a representative plaintiff.

A carriage motion was brought to determine which of two competing groups of class action firms should conduct a proposed securities class proceeding against a mining company and its executives arising from alleged misrepresentations about a Chilean mining project.

One action advanced a single claim based on environmental misrepresentations, while the competing action advanced multiple claims including environmental, capital expenditure, accounting misrepresentation, conspiracy, and limitation‑related doctrines.

The court held that on a carriage motion the judge should not determine which claim is most likely to succeed but should assess whether claims are viable and free of obvious defects.

The competing action advancing multiple viable claims and demonstrating a substantially higher level of preparation was found to better serve the interests of the class.

Carriage was therefore granted to the more comprehensive and better prepared action.

The applicant sought remedies under Part VII.1 of the Competition Act after the respondents advertised that their wireless service had fewer dropped calls than competitors without conducting adequate and proper testing beforehand.

The court previously found the respondents engaged in reviewable conduct under s. 74.01(1)(b) for making an untested performance claim, although the applicant failed to prove the claim was false or misleading under s. 74.01(1)(a).

In determining remedies, the court assessed proportionality and the factors in s. 74.1(5), including market reach, financial position, and the fact that later testing substantiated the claim.

The court held that post-claim substantiation does not excuse the statutory requirement for prior testing but is relevant to penalty quantum.

An administrative monetary penalty of $500,000 was imposed, while the request for a 10‑year prohibition order was denied.

The court addressed scheduling for submissions regarding the appropriate penalty in a proceeding brought by the Commissioner of Competition against telecommunications companies.

The parties appeared to establish timelines for written submissions and oral argument on penalty.

The court set deadlines for the applicant’s submissions, the respondents’ responding submissions, and the applicant’s reply.

Dates were also scheduled for oral argument concerning the penalty to be imposed.

In a securities class proceeding under the Class Proceedings Act, 1992 and the Securities Act, the plaintiffs sought certification for settlement purposes against certain underwriters, approval of three settlements totalling approximately $10.85 million, approval of counsel fees, and approval of a proposed plan of allocation.

The court held that the settlements were fair, reasonable, and in the best interests of the class and approved them, along with counsel fees and the appointment of an administrator.

However, the court rejected the parties’ proposed distribution plan because it excluded class members who purchased shares on the day of the corrective disclosure from any compensation.

Exercising its authority to determine the plan of allocation, the court varied the distribution plan to include those purchasers and approved the modified plan as fair and reasonable.

In an application alleging misleading advertising under ss. 74.01(1)(a) and (b) of the Competition Act regarding claims of fewer dropped calls by a wireless provider, the court addressed discovery disputes involving communications between the Competition Bureau and industry participants.

The respondents sought disclosure of communications between the applicant and several wireless competitors, as well as internal investigative notes.

The court held that public interest privilege did not apply to communications with two competitors that had publicly promoted their role in the investigation, and ordered disclosure of communications occurring before litigation became the dominant purpose.

However, documents created after litigation was contemplated were protected by litigation privilege.

Communications involving another competitor and internal notes relating to discussions with a federal department remained protected by public interest privilege.

In an application alleging misleading advertising under s. 74.01(1)(b) of the Competition Act, the respondents sought leave to call eight expert witnesses despite the five‑expert limit imposed by s. 7 of the Canada Evidence Act.

The applicant opposed the request, arguing that some expert evidence was duplicative and that certain proposed opinions concerning the “general impression” of advertisements were inadmissible.

The court held that the proposed expert evidence was not unnecessarily duplicative and would not unduly prolong the hearing.

The court also determined that the admissibility of portions of the challenged expert evidence, including survey evidence and analysis of advertisements, could be addressed during trial if relied upon.

Leave was therefore granted to the respondents to call eight expert witnesses.

The Commissioner of Competition brought an application against Rogers and Chatr alleging that their advertising claims of 'fewer dropped calls than new wireless carriers' and 'no worries about dropped calls' were false, misleading, and made without adequate and proper testing, contrary to the Competition Act.

The court found that the applicant failed to prove the claims were false or misleading.

However, the court found that the respondents failed to conduct adequate and proper testing in certain cities prior to launching the advertising campaign, thereby engaging in reviewable conduct under s. 74.01(1)(b).

The court also dismissed the respondents' constitutional challenges, finding that s. 74.01(1)(b) is a justified limit on freedom of expression and that the administrative monetary penalty does not engage s. 11 of the Charter.

The applicants brought motions to quash summonses issued by Staff of the Ontario Securities Commission to two lawyers, compelling them to attend examinations.

Staff argued the summonses were part of an ongoing investigation into insider tipping and trading.

The applicants argued the summonses were an improper attempt to conduct pre-hearing discovery of witnesses who would testify at the upcoming merits hearing.

The Commission found that the real purpose of the summonses was to prepare for the merits hearing, which is an inappropriate use of Staff's investigative powers.

The motions were granted and the summonses were quashed.

The appeal addressed whether a federal regulator had statutory authority to implement a market-based regime requiring negotiations over compensation for retransmission of local television signals.

The majority held the proposed regime exceeded statutory authority and conflicted with the copyright scheme governing retransmission rights and exceptions.

The dissent would have found a sufficient statutory basis and no operational conflict between the two statutes.

The appeal was allowed, with costs throughout.

In a contested federal election application, the appeal examined whether voting process defects required annulment where the vote margin was narrow.

The majority adopted a substantive test requiring proof both of a statutory irregularity tied to entitlement and that a person not entitled to vote actually voted.

It held multiple disqualified ballots should be restored because the evidentiary record supported entitlement or failed to prove an entitlement defect on the required standard.

The remaining invalid votes did not meet the threshold to overturn the result.

The appeal was allowed, the cross-appeal was dismissed, and the fresh-evidence motion was dismissed.

Following a merits decision finding that Coventree Inc. and its senior officers, Geoffrey Cornish and Dean Tai, failed to disclose material changes in breach of the Securities Act, the Ontario Securities Commission held a hearing to determine sanctions and costs.

The Commission emphasized the fundamental importance of timely disclosure to the integrity of capital markets.

While noting mitigating factors such as the respondents' lack of intent to mislead and their cooperation with Staff, the Commission imposed significant administrative penalties to achieve specific and general deterrence.

Coventree was ordered to pay a $1 million penalty and $250,000 in costs, while Cornish and Tai were each ordered to pay a $500,000 penalty and were prohibited from acting as directors or officers of a reporting issuer for one year.

Nunavut Iron Ore Acquisition Inc. applied to the Ontario Securities Commission for an order cease trading the shareholder rights plan of Baffinland Iron Mines Corporation.

Nunavut had made an unsolicited takeover bid for Baffinland, which was followed by a higher competing offer from ArcelorMittal supported by the Baffinland board.

The Commission found that the rights plan had served its purpose by facilitating an auction and generating a competing bid.

Maintaining the rights plan would only serve to eliminate the timing advantage of Nunavut's first-in-time offer and force an extension, potentially depriving shareholders of a revised offer.

The Commission concluded it was in the public interest to cease trade the rights plan immediately, allowing shareholders to decide between the competing offers.

The applicants, minority shareholders of MI Developments Inc. (MID), brought applications under sections 104 and 127 of the Securities Act alleging that MID failed to comply with Multilateral Instrument 61-101 (MI 61-101) by not obtaining minority shareholder approval for a series of related party transactions with Magna Entertainment Corp. (MEC).

The transactions included loans, loan extensions, and debtor-in-possession financing.

The Ontario Securities Commission dismissed the applications, finding that section 104 does not apply to related party transactions.

While the Commission permitted the applications under section 127, it concluded that MID was entitled to rely on the downstream transaction exception and the market capitalization exemption under MI 61-101.

The Commission also found no prima facie case of insider trading in connection with a related trust transaction.

The Supreme Court of Canada considered a proposed plan of arrangement for a leveraged buyout of BCE Inc. that would add substantial debt to Bell Canada, reducing the trading value of its debentures.

The debentureholders opposed the arrangement, claiming oppression under s. 241 of the CBCA and arguing the arrangement was not fair and reasonable under s. 192.

The Court held that the directors' fiduciary duty is owed to the corporation, not to specific stakeholders, though directors may consider stakeholder interests.

The debentureholders failed to establish a reasonable expectation that their investment grade rating would be maintained.

The Court affirmed the trial judge's approval of the arrangement, finding it had a valid business purpose and resolved objections in a fair and balanced way.

The appellants, an investment management firm and minority shareholder, appealed the dismissal of their oppression application against the respondent corporation and its directors.

The application judge had found that the challenged related-party transactions were within the reasonable expectations of shareholders and protected by the business judgment rule.

The Divisional Court dismissed the appeal on the merits, finding no palpable and overriding error in the application judge's factual findings or application of the law.

The court upheld the award of substantial indemnity costs due to the appellants' unfounded allegations of misconduct and misuse of the court process, but allowed the costs appeal in part to deduct pre-application costs.

The Ontario Securities Commission convened a hearing to consider a settlement agreement between Staff and Eugene N. Melnyk regarding allegations of failing to file insider trading reports and failing to disclose his relationship with offshore trusts that traded heavily in Biovail shares.

The Commission approved the settlement, which included a $750,000 administrative penalty, $250,000 in costs, a one-year ban on acting as a director of Biovail, and a reprimand, finding the sanctions sufficient for specific and general deterrence.

Sears Holdings Corporation appealed a decision of the Ontario Securities Commission regarding its insider bid for Sears Canada Inc. The OSC had found that Holdings failed to comply with disclosure obligations, entered into agreements that contravened the Securities Act, and engaged in abusive and coercive conduct.

The Divisional Court dismissed the appeal, holding that the standard of review for OSC decisions interpreting its constituting statute is reasonableness simpliciter, and that the OSC's findings and remedies were reasonable.

The respondent brought motions for immediate disclosure of materials generated during an investigation and for permission to use those materials to prepare for an interview by the United States Securities and Exchange Commission (SEC).

The Ontario Securities Commission ordered staff to disclose the materials immediately, finding that 'as soon as is reasonably practicable' means without delay if no herculean efforts are required.

The Commission also held that the respondent's use of the materials to prepare for the SEC interview would not breach the implied undertaking rule or section 16(2) of the Securities Act, given the intertwined nature of the SEC and Commission investigations.