Jessica S. Bookman

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.

In the context of Air Canada's CCAA restructuring, the appellant sought leave to appeal an order approving an equity investment agreement with Trinity Time Investments Limited and denying an adjournment to consider a competing proposal.

The Court of Appeal dismissed the motion for leave, finding no error in the supervising judge's decision to approve the agreement, which contained a 'fiduciary out' clause allowing the board to consider superior proposals.

The court held that the test for leave to appeal in CCAA proceedings—requiring serious and arguable grounds of real and significant interest—was not met.