In a certified securities class action arising from a take‑over bid, the defendant law firm moved for summary judgment dismissing negligence and statutory misrepresentation claims.
The plaintiff alleged that a partner of the firm, who acted as counsel to the bidder and sat on its board, participated in preparing a take‑over circular containing misrepresentations contrary to s. 131 of the Securities Act.
The court held that there were genuine issues requiring a trial regarding whether the law firm owed a duty of care to shareholders who received and relied on the circular.
The court further held that the question of whether a law partnership could be vicariously liable under the Partnerships Act for a partner’s statutory liability as a corporate director should also proceed to trial.
Summary judgment was refused because the issues were novel and required a full factual record.