Matthew Fleming

The plaintiff, Mohammad Reza Kamrani-Ghadjar, sought to discontinue his class action against Cidel Trust Company and Neo International Investments Ltd. in a securities misrepresentation case involving Anaergia Inc. The court approved the discontinuance with prejudice, finding no prejudice to the class or defendants, and ordered that notice be given to class members.

The court also granted procedural orders regarding factum length and amended the litigation timetable.

The applicant, Appili Therapeutics Inc., brought a motion for an interim order in connection with a proposed plan of arrangement under section 182(5) of the Ontario Business Corporations Act (OBCA).

The arrangement involved the acquisition of Appili's shares by Aditxt, Inc. through its subsidiary Adivir, Inc. The interim order sought to approve the procedure for a special meeting of shareholders to vote on the arrangement.

The court found the arrangement, negotiated by a special committee with independent advisors, provided a significant premium and included minority shareholder protections.

The court also addressed the company's continuance from the Canada Business Corporations Act (CBCA) to the OBCA, finding it transparent and without prejudice to stakeholders.

The court granted the interim order.

This application sought court approval for a plan of arrangement under section 182 of the Ontario Business Corporations Act, involving the acquisition of Magnet Forensics Inc. by Morpheus Purchaser Inc. The arrangement included the acquisition of all issued and outstanding shares, options, DSUs, and RSUs of Magnet, with different pricing for 'Rolling Shareholders' who would maintain an equity interest in the combined entity.

The court applied the three-part test for approving arrangements, assessing whether statutory procedures were met, the application was in good faith, and the arrangement was fair and reasonable.

Despite some shareholder dissent, which was below the termination threshold, the arrangement was approved, satisfying all legal requirements.

The defendants Mercedes-Benz and Mitsubishi brought a motion to dismiss the proposed class action for delay pursuant to s. 29.1 of the Class Proceedings Act, 1992.

The plaintiffs argued that the court had discretion not to dismiss the action and that all defendants must join the motion.

The court held that s. 29.1 is mandatory and does not require all defendants to join.

The action was dismissed against the moving defendants, but the court exercised its jurisdiction under s. 12 to order that the dismissal be set aside if the plaintiffs file a complete certification motion record within thirty days.

At a case management conference in a class proceeding, certain defendants requested a timetable for a motion to dismiss the action for delay under s. 29.1 of the Class Proceedings Act, 1992.

The plaintiffs sought to file material, conduct written interrogatories, or summons witnesses to explore why other defendants took no position on the motion.

The court denied the plaintiffs' request for interrogatories and cross-examinations, finding them unnecessary, irrelevant, and likely to breach privilege.

Exercising its case management powers under s. 12, the court directed the motion to proceed in writing without cross-examinations and set a timetable.

The applicant sought a final order approving a proposed plan of arrangement under section 192 of the Canada Business Corporations Act to facilitate a going private transaction.

The arrangement was overwhelmingly approved by the shareholders at a special meeting.

The court found that all statutory and court-ordered requirements were met, the arrangement was put forward in good faith, and it was fair and reasonable.

The final approval order was granted.

The special committee of FAX Capital Corp. brought a motion for an interim order under section 192 of the Canada Business Corporations Act to approve the procedure for calling and holding a special meeting of shareholders.

The meeting was to consider a proposed plan of arrangement intended to take the company private.

The court found that the applicant was acting in good faith and met the statutory requirements.

The interim order was granted, establishing the mechanics for notice, voting, and dissent rights.

The plaintiff pharmaceutical manufacturer sued the corporate defendants and their sole director, a pharmacist, alleging unauthorized 'vial-splitting' of a specialty ophthalmic drug.

The individual defendant moved to strike the claims against him personally, arguing they duplicated the claims against the corporate defendants.

The court struck the intentional tort claims but allowed the negligence and unjust enrichment claims to proceed, finding it possible the individual acted in his personal capacity as a pharmacist.

The plaintiff also successfully moved to strike a paragraph in the statement of defence that referenced the contents of its complaint to the Ontario College of Pharmacists, as such contents are inadmissible under section 36(3) of the Regulated Health Professions Act.

The appellant purchased a painting purportedly by renowned Anishinaabe artist Norval Morrisseau for $20,000, accompanied by a provenance statement.

After the Art Gallery of Ontario indicated the painting was likely a fake, the appellant sued for return of the purchase price, lost investment returns, and punitive damages.

The trial judge dismissed the action, finding the authenticity of the painting remained uncertain.

The Court of Appeal allowed the appeal, finding the trial judge erred by rejecting expert evidence based on his own personal research not in evidence, and by misapprehending the contract's terms regarding the provenance statement.

The court awarded damages for breach of contract and the Sale of Goods Act, plus punitive damages.

In a negligence appeal arising from an auditor’s failure to detect corporate fraud, the Court applied the Anns/Cooper framework to pure economic loss claims for negligent misrepresentation and negligent performance of a service.

The Court held that liability must be confined to losses that fall within the purpose of the defendant’s undertaking and the plaintiff’s reasonable reliance.

It found no recoverable loss tied to services provided for investment solicitation, but upheld liability for losses flowing from a negligent statutory audit prepared for shareholder oversight.

The appeal was allowed in part, and damages were reduced to reflect only losses causally connected to the statutory audit.

The plaintiff sought leave under s. 138.8 of the Securities Act to pursue a secondary market misrepresentation class action arising from a mining company’s public restatement of prior financial statements related to “bill and hold” revenue recognition.

The court held that the explicit restatement acknowledging prior errors and internal control weaknesses created a reasonable possibility that the claim against the issuer could succeed at trial.

However, the individual officers and directors demonstrated a reasonable investigation defence through detailed evidence of their reliance on professional auditors and careful review of revenue recognition practices.

As a result, the statutory leave requirement was satisfied only as against the issuer company.

Leave was refused against the individual defendants.

Following judgment awarding damages for auditor negligence, the court determined the appropriate prejudgment interest rate and start date under the Courts of Justice Act.

The court rejected the plaintiff’s proposed interpretation of the Ministry interest rate tables and held that the statutory quarterly rate corresponding to the commencement of the action applied.

The court also declined to average interest rates over the period absent compelling justification, emphasizing that deviations from the statutory scheme require substantial evidence.

Applying ss. 128 and 130 of the Act, the court structured the accrual of prejudgment interest to reflect when losses were actually incurred rather than the breach date alone.

Interest was calculated in stages culminating in a total prejudgment interest award exceeding $33 million.

Livent Inc., through its Special Receiver, sued its former auditors, Deloitte & Touche, for negligence and breach of contract in failing to detect massive corporate fraud perpetrated by Livent's directing minds, Garth Drabinsky and Myron Gottlieb.

The court found that Deloitte failed to conduct its 1996 and 1997 audits in accordance with generally accepted auditing standards (GAAS), particularly regarding preproduction costs and complex revenue transactions.

The court rejected Deloitte's defences based on the corporate identification doctrine and ex turpi causa, holding that the fraud of the directing minds could not be attributed to the company to shield the negligent auditors.

Damages were assessed at $84,750,000, representing the increase in Livent's liquidation deficit caused by the delayed discovery of the fraud, discounted by 25% for business contingencies.

In a CCAA proceeding, the Applicants (Hollinger Inc. et al.) sought approval of settlement agreements with their former auditors (KPMG) and lawyers (Torys).

The Non-Settling Defendants, including Conrad Black and David Radler, opposed the settlements, arguing the court lacked jurisdiction and that the included third-party releases and bar orders would deprive them of procedural rights to discovery.

The court held it had jurisdiction under the CCAA to manage litigation as a corporate asset.

The court approved the Pierringer-style settlements, finding that the procedural rights of the Non-Settling Defendants could be adequately protected through active case management and the application of the principle of proportionality in discovery.