Ryan A. Morris

This endorsement addresses two production issues in a proposed class action for misrepresentation under the Securities Act and the Class Proceedings Act.

The plaintiff sought production of (1) a podcast audio or transcript quoted by defendant Michael Novogratz in his affidavit, and (2) documents underlying a chart referenced by defendant Alex Ioffe.

The court ordered production of the portion of the podcast transcript quoted in the affidavit, but declined to order production of the underlying documents for the chart, finding such requests more appropriate for cross-examination.

The court also set out a timetable for the upcoming motions and clarified the process for resolving refusals.

This decision addresses the admissibility of two expert reports submitted by the plaintiff in a proposed class action certification motion.

The defendants sought to strike the reports, arguing lack of objectivity and improper scope.

The court ruled that the report from an investor in the defendant company was inadmissible due to a direct economic conflict of interest, despite the expert's disclosure and offer to opt out of class compensation.

The report from a lawyer specializing in securities and corporate law was deemed admissible, as it provided necessary and helpful expertise on complex regulatory standards, but its concluding paragraphs opining on the ultimate issue of misrepresentation were ordered redacted as they usurped the court's role.

The plaintiff, Peter Ross, brought an unopposed motion to certify a class proceeding against RBC Global Asset Management Inc. and RBC Investor Services Trust.

The action alleges that the defendants breached trust, fiduciary, and contractual duties by paying excessive trailing commissions to discount brokers from mutual fund assets.

The court granted certification, finding all five criteria under section 5(1) of the Class Proceedings Act, 1992, were met, including the disclosure of a cause of action, an identifiable class, common issues, preferable procedure, and a suitable representative plaintiff with a workable plan.

The applicant sought to enforce a letter of request issued by a United States District Court to compel the respondent, an Ontario resident and former employee of a related company, to be examined under oath for use in a US proceeding.

The respondent and an intervener opposed the application, arguing the evidence was coerced, irrelevant, and enforcing the request would be contrary to public policy and unduly burdensome.

The court found that the statutory preconditions were met, the evidence was relevant and not otherwise obtainable, and enforcing the request was not contrary to public policy or unduly burdensome.

The application was granted.

Terra Firma Capital Corporation sought court approval for a plan of arrangement under section 182 of the Business Corporations Act (Ontario), which would result in GM Capital Corp. acquiring all outstanding common shares of Terra Firma it did not already own.

The arrangement was overwhelmingly approved by both shareholders and minority shareholders.

The court applied the three-part test for approving arrangements, confirming that statutory procedures were met, the application was made in good faith, and the arrangement was fair and reasonable, supported by strong shareholder approval, board recommendations, and fairness opinions.

The final approval order was granted.

The defendant, Olympia Trust Company, brought a consent motion to dismiss third-party proceedings against ADI Developments (Link) Inc., ADI Development Group Inc., and Tariq Adi.

The motion was brought after the plaintiff's main action against Olympia Trust was dismissed and a comprehensive settlement agreement resolving claims against the ADI Defendants was approved.

The court granted the motion, dismissing the third-party proceedings with prejudice and without costs, as the basis for the third-party claim was obviated and the dismissal was on consent.

The appellant, a representative plaintiff in a class action, appealed the dismissal of his motion to certify a class action against Olympia Trust Company.

The action alleged that Olympia Trust, as a custodial trustee for syndicated mortgage loans (SMLs) held in registered savings accounts, breached trust and fiduciary duties by failing to ensure the SMLs were "qualified investments" under the Income Tax Act.

The motion judge found it plain and obvious that the claims for breach of trust and fiduciary duty could not succeed, and that other certification criteria were not met.

The Court of Appeal upheld the motion judge's decision, confirming that the Income Tax Act provisions and the Declaration of Trust did not impose the extensive "gatekeeping" or "watchdog" duties alleged by the appellant on Olympia Trust.

The appeal was dismissed with costs.

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 plaintiffs in two putative class actions sought leave to discontinue one action entirely and partially discontinue the second against all but one defendant group.

This procedural step aimed to streamline the proceedings by converting omnibus actions into separate class proceedings against distinct defendant groups.

The defendants did not oppose the requests.

The court granted leave for both discontinuances, recognizing the efficiency gains.

The applicant brought a motion for an interim order under section 192(4) of the Canada Business Corporations Act to call a special meeting of shareholders.

The meeting was to consider a plan of arrangement whereby the respondent would acquire all common shares of the applicant.

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

The interim order was granted, authorizing the meeting and establishing notice and voting mechanics.

The plaintiffs brought a motion for leave to amend their statement of claim in an action concerning an unpaid promissory note related to a share purchase agreement.

The defendant opposed several amendments on grounds of res judicata, expiry of limitation periods, pleading evidence, frivolousness, and inexplicable delay.

The court denied leave for amendments relating to an option agreement, finding them barred by res judicata as the issue had been finally determined in a prior summary judgment.

However, the court granted leave for the remaining amendments, including claims for breach of the duty of honest contractual performance, finding they arose from the same factual matrix and were not statute-barred.

The court also found the delay in seeking amendments was adequately explained and any presumed prejudice was rebutted.

The plaintiff sought partial indemnity costs of $290,704 following a successful bifurcated certification motion in a class action against the defendant.

The defendant argued the costs should be reduced by 50% because the plaintiff was successful in certifying the common law negligence claim but unsuccessful in certifying the statutory misrepresentation claim.

The court rejected the defendant's argument, finding that the plaintiff was the successful party in a complex, hard-fought motion and that divided success on specific claims does not necessarily warrant a reduction in costs.

The plaintiff was awarded the full amount claimed.

The plaintiff brought a motion to certify a class action against the manager of an exchange-traded fund (ETF) that suffered catastrophic losses following a spike in market volatility.

The plaintiff advanced claims in common law negligence and statutory misrepresentation under s. 130 of the Securities Act.

The court certified the common law negligence claim, finding it met all certification criteria.

However, the court refused to certify the s. 130 claim because the plaintiff could not satisfy the identifiable class criterion, as it was impossible to prove which investors purchased 'Creation Units' directly from the manager versus units on the secondary market.

Torstar Corporation sought court approval for a plan of arrangement to sell all its shares to NordStar Capital LP for $0.74 per share.

The arrangement was overwhelmingly approved by shareholders.

Competing bidder CMMH and dissenting shareholder Patrick Collins objected, alleging inadequate disclosure and a flawed bidding process due to hard lock-up agreements.

The court found the arrangement had a valid business purpose, the process was conducted in good faith with professional advice, and the objections were resolved fairly.

The court emphasized the weight given to the shareholder vote and the Board's business judgment, particularly in uncertain times, and approved the arrangement.

This is an appeal from a certification judge's order refusing to certify an investor class action and dismissing the action on the basis that the pleadings did not disclose a reasonable cause of action.

The proposed class action arose from the dramatic collapse of a derivatives-based exchange-traded fund (ETF) managed by the respondent, Horizons ETFS Management (Canada) Inc., which lost almost 90% of its value overnight.

The appellant, Graham Wright, alleged negligence and misrepresentations in the prospectus under s. 130 of the Securities Act.

The certification judge dismissed both claims.

The Court of Appeal allowed the appeal in part, finding that the negligence claim did disclose a reasonable cause of action.

For the s. 130 Securities Act claim, the Court found it did not disclose a reasonable cause of action as pleaded but granted leave to amend the statement of claim to assert the purchase of 'Creation Units', remitting the matter to the certification judge for further determination of certification criteria.

The plaintiff sought to certify a class action against the manager of a complex, passively managed exchange-traded fund (ETF) after the fund's value collapsed, causing significant losses to retail investors.

The plaintiff alleged common law negligence for designing and selling a risky product and failing to actively manage it, as well as a statutory claim under s. 130 of the Securities Act for misrepresentations.

The court dismissed the certification motion and the action, finding it plain and obvious that the pleadings disclosed no reasonable cause of action.

The court held that the negligence claim was an unprecedented attempt to recover pure economic loss for a 'shoddy' financial product, and that the statutory claim for ETF trading properly falls under the secondary market liability provisions of Part XXIII.1 (s. 138.3), not the primary market provisions of s. 130.

The appellants appealed a decision refusing to certify a class action and dismissing claims against three respondents on the basis that the claims disclosed no reasonable cause of action under s. 5(1)(a) of the Class Proceedings Act, 1992.

The appellants conceded that the motion judge made no error in law but challenged his application of the principles relating to the duty of care to the facts.

The Court of Appeal upheld the motion judge's decision, finding his reasons correct and concluding that the appellants had pleaded no reasonable cause of action against the respondents.

The court also found no error in the motion judge's assessment of costs.

The appellant appealed orders from the Superior Court of Justice regarding a stock option agreement dispute.

The motion judge found that even if the appellant had terminated the respondent's consultant status, the appellant breached its obligation under Quebec law to execute the contract in good faith by failing to ensure the respondent retained a qualifying status under the stock option agreement that would have entitled him to exercise irrevocable stock options or to consider alternative arrangements.

The Court of Appeal upheld the motion judge's decision, finding no error in applying Quebec law and granting the appropriate remedy under Quebec law.

The appeal was dismissed with costs fixed at $25,000.00 all inclusive.

The applicants sought a declaration that the respondent's proposed mandatory conversion of outstanding convertible preferred shares would contravene its Articles of Continuance.

The central issue was the interpretation of the "Liquidity Condition" within the Mandatory Conversion Provision, specifically whether the average daily trading volume should be restricted to the Toronto Stock Exchange (TSX) alone or include all trading reported in the TSX Composite index (which aggregates trading from TSX and alternative trading platforms).

The court, applying principles of statutory and contractual interpretation, found that the Liquidity Condition should include all transactions reported in the TSX Composite, thereby dismissing the applicants' request for a declaration and their related oppression claim.

Following a finding that the defendant breached its duty of good faith by refusing to allow the plaintiff to exercise stock options, the court had to determine the appropriate remedy.

The parties' experts disagreed on whether Quebec law required specific performance or damages.

The court appointed an independent expert, former SCC Justice Louis LeBel, who concluded that specific performance was the appropriate remedy under Quebec law.

The court rejected the defendant's argument that Ontario law should apply as the lex fori, finding that the choice of remedy was substantive and governed by the lex causae (Quebec law).

The plaintiff was awarded specific performance and partial indemnity costs.