Luis Sarabia

The plaintiffs sought repayment of a $1 million non-refundable amount paid under a mining share and debt purchase and lock-up agreement after they failed to complete a proposed takeover bid.

They alleged breach of contract arising from the defendants’ handling of a third-party financing proposal, non-delivery of share certificates, and exercise of a repurchase option, and argued the option was an unenforceable penalty or should be relieved against in equity.

The court held there was no contractual obligation to shut down the third-party transaction, no fundamental breach in relation to share certificates or the $1.00 repurchase payment, and no damages were proven on those allegations.

Applying the relief from forfeiture jurisprudence, the court found the clause was a forfeiture provision, not penal, and in any event not unconscionable in a heavily negotiated agreement between sophisticated parties.

The action was dismissed.

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.

In CCAA proceedings involving the Nortel group, the joint administrators of certain European, Middle Eastern, and African debtor entities brought a motion under Rule 30.10 of the Rules of Civil Procedure seeking production of documents from a non‑party accounting firm relating to transfer pricing arrangements and intellectual property development.

The court reviewed the governing principles for non‑party production, including the requirement that such orders be granted only in exceptional circumstances and where it would be unfair to require the moving party to proceed to trial without the documents.

The court found that many of the requested documents had already been communicated to the client and were likely produced through existing discovery processes.

For documents not communicated to the client, the moving party failed to demonstrate their importance or any evidentiary gap justifying exceptional production.

The court concluded that proceeding to trial without the requested materials would not be unfair and dismissed the motion with costs.

The plaintiffs sought consent certification of a proposed securities class action alleging that the defendant mining company and certain officers misrepresented the scope and impact of water inflow problems at a Quebec gold mine, causing losses to purchasers of the company’s shares.

The court considered the certification requirements under s. 5(1) of the Class Proceedings Act, 1992 and, given the parties’ consent and the evidentiary record, found that the statutory criteria were satisfied.

The plaintiffs also sought leave under Part XXIII.1 of the Securities Act to pursue statutory secondary market misrepresentation claims.

The court held that the action was brought in good faith and that there was a reasonable possibility of success at trial.

Certification and leave were granted.

Hahn Investment applied for a hearing and review of a decision by the Investment Industry Regulatory Organization of Canada (IIROC) refusing to vary or cancel certain trades in Exchange Traded Funds (ETFs) made on October 14, 2008.

Hahn Investment argued the trades were unreasonable due to significant divergence between the underlying values of the indices and the traded prices.

The Ontario Securities Commission dismissed the application, finding that IIROC correctly applied its policies and procedures, did not overlook material evidence, and that new evidence regarding the underlying security of one ETF was not compelling enough to change the outcome.

The Commission emphasized the need for deference to SRO decisions, particularly those involving technical expertise and time-sensitive market rulings.

The Special Committee of the Board of Directors of Patheon Inc. applied for relief under sections 104(1) and 127 of the Securities Act in connection with a take-over bid by JLL Patheon Holdings, LLC.

The Ontario Securities Commission dismissed the application, provided that JLL complies with several conditions.

These conditions included terminating a voting agreement with the MOVA Group, certifying the absence of any other agreements regarding the offer, amending the offer circular to disclose the decision, issuing a news release, and extending the offer period.

The Special Committee of Patheon Inc. applied to the Ontario Securities Commission for relief regarding an unsolicited take-over bid by JLL Patheon Holdings, LLC.

The Special Committee alleged that a voting agreement between JLL and a group of minority shareholders (the MOVA Group) violated the identical consideration and collateral benefit provisions of the Securities Act.

JLL proposed to terminate the voting agreement and extend the offer.

The Commission dismissed the Special Committee's application subject to conditions, including that JLL terminate the voting agreement, extend the offer for at least 15 days, and certify that no new agreement with the MOVA Group would be entered into for 120 days following the expiry of the offer.

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.