Natalia Paunic

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.

Following the release of reasons for decision on three motions in a bankruptcy proceeding, the parties could not agree on the terms of the resulting orders.

The applicant argued the orders should be dated when signed and that he was not properly served with the Receiver's motion via an email link.

The court held that the orders are effective from the date the reasons were released, as no substantial matters remained to be determined.

The court also found that service via an email link is valid and routine.

The applicant's subsequent motion for reconsideration was dismissed as an abuse of process, and costs were awarded to the responding parties.

The plaintiffs sought to certify five related class actions against Fortress Real Capital Inc., its principals, and two real estate appraisers regarding losses suffered from investing in syndicated mortgage loans.

The court certified the actions against Fortress and its principals, finding the pleadings disclosed viable causes of action in fraud and negligent misrepresentation, and that the other certification criteria were met.

However, the court dismissed the certification motions against the appraisers, concluding it was plain and obvious the claims would fail because the appraisers owed no duty of care to the investors and their reports expressly disclaimed third-party reliance.

The court also held the Harmony Village action in abeyance to allow the plaintiffs to substitute a suitable representative plaintiff.

Binance Holdings Limited appealed orders from the Divisional Court and Ontario Securities Commission regarding an investigation into Binance's operations in Ontario.

The Commission had issued a summons demanding production of documents and communications relating to alleged violations of the Securities Act.

Binance challenged the summons as unconstitutionally overbroad under section 8 of the Canadian Charter of Rights and Freedoms.

The Court of Appeal allowed the appeal in part, finding that the Divisional Court erred in declining to judicially review the Charter arguments and that the summons was an unreasonable seizure because it lacked a reasonable foundation to believe the demanded documents were relevant to the investigation.

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 moving party, Binance Holdings Limited, sought an order under ss. 6(2) and (3) of the Courts of Justice Act to join two appeals: one to the Divisional Court from an OSC decision and another to the Court of Appeal from a Divisional Court decision.

Binance argued the appeals were "in the same proceeding" and combining them would serve the administration of justice.

The Ontario Securities Commission opposed, arguing the appeals were distinct and combining them would cause delay and bypass appellate hierarchy.

The court granted the motion, finding the appeals were in the same proceeding due to identical parties, facts, legal issues, and legal origin (investigation order and summons).

The court also found that combining the appeals would allow for a full and final resolution of the jurisdictional issue, mitigate the risk of inconsistent findings, and secure a just, expeditious, and least expensive determination of the issues.