Graham Splawski

In this class action damages trial arising from negligent facilitation of frequent trading in retail mutual funds, the court held that dilution caused by time zone arbitrage should be quantified using the Next Day NAV method rather than the profits method.

The court rejected the argument that prior OSC settlements conclusively compensated investors, found that objective trading characteristics and circumstantial evidence were sufficient to identify time zone arbitrage, and declined to require direct evidence of each trader’s subjective motivation.

Additional timer accounts were included for one defendant outright and for the other subject to specified filters, and the class definition was amended accordingly to exclude those market timers from recovery.

The court awarded principal damages of $60.48 million against one remaining defendant, plus further amounts for qualifying additional accounts, and $37,900,659.63 against the other, with simple prejudgment interest at 2.8% from commencement of the action.

The plaintiff in a proposed class action against Amazon moved for approval of a third-party funding agreement under section 33.1 of the Class Proceedings Act, 1992.

The motion was unopposed.

The court found the agreement to be fair and reasonable, noting it provided sufficient funding for disbursements and adverse costs without overcompensating the funder.

The court also granted an order designating the plaintiff's lawyers as class counsel and precluding the commencement of similar actions in Ontario without leave of the court.

The court approved a proposed settlement and certified the action for settlement purposes under the Class Proceedings Act, 1992.

The class consists of approximately 100 investors in a failed real estate limited partnership project.

The settlement restores the class members’ proportionate interest in the property, now with greater development density and less debt, and is considered generous.

The court found the settlement fair, reasonable, and in the best interests of the class, and approved class counsel’s fees.

The action will continue only as between the defendants for unresolved crossclaims.

The Court of Appeal for Ontario dismissed an appeal by Denver Davis from two orders: one staying a proposed class action against Amazon in favour of arbitration, and the other dismissing the motion for certification of the class action.

The class action alleged Amazon was liable for breach of employment contracts, breach of good faith, unjust enrichment, and negligence, and sought damages on behalf of approximately 73,000 delivery workers.

The court held that the motion judge did not err in finding that Amazon was not a common employer of the delivery associates (DAs) employed by third-party logistics companies, and that the requirements for certification were not met.

The appeal was dismissed and costs awarded to the respondents.

The Court of Appeal for Ontario dismissed Binance's appeal from the certification of a class action brought by Canadian investors who purchased cryptocurrency derivatives through Binance.

The court upheld the motion judge’s finding that the claim disclosed reasonable causes of action under both the Securities Act and at common law, and that the requirements for certification under the Class Proceedings Act were met.

The court rejected Binance’s arguments regarding the statutory and common law causes of action, the commonality of issues, and the appropriateness of class-wide remedies, finding no reversible error in the motion judge’s analysis.

The Ontario Securities Commission alleged that the respondents engaged in an illegal distribution of Canopy Growth Corporation shares and that Cormark and Kennedy failed to deal fairly, honestly, and in good faith with Canopy, or alternatively, acted contrary to the public interest.

The allegations centered on a series of transactions involving a private placement, a securities loan agreement, and short sales executed when Canopy was added to the TSX composite index.

The Capital Markets Tribunal dismissed all allegations, finding that the transactions did not constitute an illegal distribution under the extended definition, Canopy was not a client of Cormark or Kennedy, and the respondents did not mislead Canopy or otherwise engage the Tribunal's public interest jurisdiction.

The defendants in several related class actions brought motions for summary judgment, arguing that the plaintiffs' actions were statute-barred by limitation periods or were a nullity for failing to obtain leave to commence.

The court adjourned the limitation period motions, finding they overlapped with common issues in earlier certified class actions.

The court dismissed the motions based on the leave requirement, interpreting the certification orders' leave provisions as applying only to competing class actions representing the same class members, not to actions by different classes arising from the same factual matrix.

The appellant, Binance Holdings Limited, appealed a motion judge's order dismissing its motion for a stay of proceedings in favour of arbitration.

The underlying dispute involved a proposed class action by purchasers of cryptocurrency derivatives against Binance for alleged violations of the Ontario Securities Act.

The motion judge had found the arbitration clause void due to public policy and unconscionability, and that exceptions to the competence-competence principle applied, allowing the court to decide the validity of the arbitration clause.

The Court of Appeal dismissed the appeal, affirming the motion judge's decision that the arbitration clause was inaccessible and unconscionable, effectively insulating Binance from meaningful challenge, and that the court properly exercised jurisdiction over the validity of the arbitration agreement.

The plaintiffs sought certification of a class action against Binance for illegal sales of cryptocurrency derivative products without registration or prospectus, contrary to the Ontario Securities Act and common law.

The court granted certification, finding a recognizable cause of action, an identifiable class, and common issues suitable for class-wide determination, including liability and remedies like rescission and aggregate damages.

The court rejected the defendants' arguments regarding the mechanical impossibility of rescission and the unfeasibility of aggregate damages, noting a lack of factual basis for their claims of user-to-user contracts.

The plaintiffs commenced a proposed class action against Binance for selling crypto derivatives products without filing a prospectus, contrary to the Securities Act.

Binance brought a motion to stay the action in favour of arbitration in Hong Kong, relying on an arbitration agreement in its online terms of service.

The court dismissed the motion, finding the arbitration agreement void ab initio as contrary to public policy and unconscionable, given the disproportionate cost of arbitration in Hong Kong compared to the average investor's claim and the inequality of bargaining power in the standard form 'click' contract.

In an enforcement proceeding, the moving parties (Cormark and Kennedy) sought a summons directing a non-party (Canopy) to produce documents listed in privilege logs previously provided to Staff.

The Capital Markets Tribunal found that the documents appeared relevant to the moving parties' ability to make full answer and defence, particularly regarding Canopy's state of mind.

The Tribunal issued the summons and ordered that the documents be produced to a third-party referee to conduct a privilege review, as the logs raised questions about the validity of the solicitor-client privilege claims.

In a proposed employment law class action, Amazon successfully resisted certification and obtained a stay for certain claims.

Amazon sought approximately $2.0 million in costs, while the plaintiff, Denver Davis, argued for an award of around $400,000.

The court, applying principles of reasonableness and access to justice in class proceedings, awarded Amazon costs on a partial indemnity basis of $750,000, finding both parties' requested amounts to be unreasonable.

The decision emphasized that costs should reflect what an unsuccessful party could reasonably expect to pay, not necessarily the successful party's actual costs, and acknowledged the public interest element in the plaintiff's claim.

In a proposed employment misclassification and common employer class action brought on behalf of delivery workers, the court stayed the claims of workers bound by arbitration agreements and dismissed certification.

Applying the stay framework under the Arbitration Act, 1991 and the unconscionability analysis from the Supreme Court’s arbitration jurisprudence, the court held the arbitration clauses were enforceable and not contrary to public policy.

The court further held that the common employer theory against the retailer in relation to workers hired by numerous third-party logistics companies was legally untenable and unsuitable for certification because the cause of action, common issues, and preferable procedure criteria were not met.

Although the direct-employer claims of certain drivers might otherwise have supported limited certification, the proceeding was ultimately stayed in part and the certification motion dismissed.

The respondent, Marc Judah Bistricer, brought a motion seeking additional disclosure from Staff of the Ontario Securities Commission regarding documents obtained during its investigation.

Staff alleged that the respondents engaged in abusive short selling and other transactions contrary to the animating principles of the Securities Act.

Bistricer sought documents relating to similar transactions by others and all materials obtained under section 11 investigation orders.

The Capital Markets Tribunal dismissed the motion, finding that the disclosure request was too vague and imprecise.

Furthermore, even interpreting the request generously, the Tribunal held that the requested documents were irrelevant, as the standard for the respondents' conduct is not determined by the prevalence of similar conduct by others in the market, and Staff's disclosure obligation does not extend to all materials obtained during an investigation.

This endorsement addresses the sequencing of motions in a series of related class actions.

The 2018 plaintiffs sought a temporary stay of the 2022 actions.

The defendants proposed hearing the stay motion concurrently with their summary judgment motions, citing limitation period defenses.

The 2022 plaintiffs argued for their certification motion to proceed if the stay was delayed.

The court, acting as case management judge, directed that the motion to stay be heard first, finding no significant efficiencies in combining it with the summary judgment motions and stating that certification motions should only proceed after summary judgment motions are determined.

The plaintiff sought court approval for a Litigation Funding Agreement (LFA) to fund a class action against the defendants.

The court examined the LFA under section 33.1 of the Class Proceedings Act, 1992, assessing whether it was in the best interests of the class, furthered access to justice, was not champertous, and did not interfere with the lawyer-client relationship.

The court found the LFA fair, reasonable, and compliant with statutory requirements, noting the funder's financial capacity and undertaking for costs.

The motion was granted, and an order was also made designating class counsel and precluding similar actions without notice and leave.

The plaintiffs brought a class action against mutual fund managers for allowing certain investors to engage in frequent short-term trading (market timing/time zone arbitrage), which allegedly diluted the returns of long-term unitholders.

The court found that the defendants owed a duty of care to the funds and breached the standard of care by failing to prevent, and actively facilitating, frequent short-term trading contrary to their prospectuses.

However, the court dismissed the claim for breach of fiduciary duty, finding no bad faith or dishonesty.

The matter was directed to proceed to a damages trial.

The plaintiffs in two putative class actions sought leave to discontinue one action entirely and partially discontinue the second against all but one defendant group.

This procedural step aimed to streamline the proceedings by converting omnibus actions into separate class proceedings against distinct defendant groups.

The defendants did not oppose the requests.

The court granted leave for both discontinuances, recognizing the efficiency gains.

The plaintiff in a securities class action brought a motion to discontinue the action against the underwriter defendants and to unconditionally certify the primary market misrepresentation claim against the remaining corporate and individual defendants.

The action had been stalled due to an appeal regarding the disclosure of prospectus purchasers needed to find a representative plaintiff against the underwriters.

The court approved the discontinuance under section 29 of the Class Proceedings Act, 1992, finding it was in the best interests of the class to avoid further delay and proceed against the remaining defendants, who were jointly and severally liable and financially capable of satisfying a judgment.

The moving parties (defendants) brought a motion to stay a production order issued by Perell J. pending the disposition of their appeal.

The Divisional Court granted the motion and ordered the stay.