COURT FILE NO.: 3957-11CP

DATE: 2013-03-06

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: PETER ROONEY and ARCHIE LEACH (Plaintiffs)

-and-

ARCELORMITTAL S.A., LAKSHMI N. MITTAL, ADITYA MITTAL, 1843208 ONTARIO INC., PHILIPPUS F. DU TOIT, NUNAVUT IRON ORE ACQUISITION INC., IRON ORE HOLDINGS, LP, NGP MIDSTREAM & RESOURCES, L.P., NGP M&R OFFSHORE HOLDINGS, L.P., JOWDAT WAHEED, BRUCE WALTER, JOHN T. RAYMOND, JOHN CALVERT, BAFFINLAND IRON MINES CORPORATION, RICHARD D. MCCLOSKEY, JOHN LYDALL and DANIELLA DIMITROV (Defendants)

BEFORE: JUSTICE L. C. LEITCH

COUNSEL:
A. Dimitri Lascaris, Michael G. Robb, for the Plaintiffs

Alan Mark, M. Brown, for the Defendants Arcelormittal S.A., Lakshmi N. Mittal, Aditya Mittal, 1843208 Ontario Inc., Pillippus F. Du Toit and Baffinland Iron Mines Corporation

Andrea L. Burke, for the Defendants Nunavut Iron Ore Acquisition Inc., Iron Ore Holdings, LP, NGP Midstream & Resources, L.P., NGP M&R Offshore Holdings, L.P., Jowdat Waheed, Bruce Walter, John T. Raymond & John Calvert

Alex Rose, for the Defendants Richard D. McCloskey, John Lydall & Daniella Dimitrov

HEARD: October 24, 2012

ENDORSEMENT

PART 1 – THE TRANSFER MOTIONS

[1] The defendants, Arcelormittal S.A., Lakshmi N. Mittal, Aditya Mittal, 1843208 Ontario Inc., Pillippus F. Du Toit and Baffinland Iron Mines Corporation (collectively, the “Arcelormittal Defendants”) move for an order transferring this proceeding to Toronto.

[2] The defendants, W.W. Mines Inc. (formally, Nunavut Iron Ore Acquisition Inc.), Iron Ore Holdings, LP, NGP Midstream & Resources, L.P., NGP M&R Offshore Holdings, L.P., Jowdat Waheed, Bruce Walter, John T. Raymond and John Calvert (collectively, the “Nunavut Defendants”) and the defendants Richard D. McCloskey, John Lydall and Daniella Dimitrov have brought identical motions.

[3] The three groups of moving parties submit that this proceeding has virtually no connection to this jurisdiction; all of the important events related to the action occurred in Toronto, Ontario and the overwhelming majority of defendants and prospective witnesses are in Toronto, Ontario.

[4] On the other hand, the plaintiffs, who resist this motion, submit that this action has a multi-national character; it is not Toronto centric and, as a practical matter, at most there is a de minimis increase in costs if the action were to remain in London, Ontario where it has been commenced.

What is the Subject of this Action?

[5] This proposed class action concerns a takeover of Baffinland Iron Mines Corporation (“Baffinland”) by an acquisition of shares as part of a joint bid through the Toronto Stock Exchange (the “TSX”).

[6] Baffinland was incorporated under the laws of Ontario and has its headquarters in Toronto, Ontario. Its only business is in mining operations on property it owns on Baffin Island in Nunavut, Canada.

[7] There were essentially two bidder groups seeking to acquire control of Baffinland: the Arcelormittal group and the Nunavut group. Each group had made competing takeover bids to acquire control of Baffinland.

[8] Ultimately, on January 14, 2011, the two competing groups made a joint bid through 1843208 Ontario Inc. to acquire Baffinland. A very large percentage of the outstanding common shares and outstanding warrants of Baffinland were acquired pursuant to the joint bid which expired on February 17, 2011.

The Valuation Proceeding

[9] Baffinland brought an application in the Toronto Superior Court of Justice (Commercial List) to approve a Plan of Arrangement whereby 1843208 Ontario Inc. would acquire the remaining outstanding shares and warrants of Baffinland not tendered in response to the joint bid. This Plan of Arrangement became effective on March 28, 2011.

[10] Fifty eight persons who held shares in Baffinland exercised their right to dissent to the Plan of Arrangement and demanded payment of fair value for their shares.

[11] As a result, there is presently an application pursuant to s. 185 of the Ontario Business Corporations Act, R.S.O. 1990, c. B.16 pending before the Toronto Superior Court of Justice (Commercial List) to fix a fair value for the common shares held by the 58 dissenting shareholders (the “valuation proceeding”).

[12] The plaintiffs have brought a motion seeking a stay of the valuation proceeding pending the determination of the certification motion in this action (the “Stay Motion”). The Stay Motion will be dealt with in Part 2 of this endorsement.

The Proposed Representative Plaintiffs

[13] Mr. Rooney tendered 98,000 Baffinland shares pursuant to the joint bid and also sold Baffinland shares in the secondary market after January 14, 2011. He is a resident of Uxbridge, Ontario and has business interests in London, Ontario. He has a relationship with colleagues of class counsel. His evidence on cross-examination was that it is his strong preference that this action be case managed and tried in London where his chosen counsel is located.

[14] Mr. Leach sold 3,768,100 Baffinland shares in the secondary market after January 14, 2011. He is a resident of London, Ontario and is President and Chief Executive Officer of a company whose business is based in London. He has previously been represented by class counsel. He too has deposed that his strong preference is to have this action case managed and tried in London where he lives and where his chosen counsel are located.

The Proposed Class

[15] The representative plaintiffs propose to represent all persons (other than those defined as excluded persons, the defendants and related parties) who tendered shares in Baffinland for sale pursuant to the joint bid, who disposed of Baffinland shares after January 14, 2011, or whose Baffinland shares were automatically transferred or deemed to have been transferred pursuant to the Plan of Arrangement either by exercise of their dissent rights or otherwise.

The Defendants

[16] The defendants and their places of operation or residence are as follows:

i. BAFFINLAND IRON MINES CORPORATION was the target of the takeover and, as previously noted, it is incorporated under the laws of Ontario and its principal office is in Toronto, Ontario.

ii. ARCELORMITTAL S.A. is a company incorporated under the laws of Luxembourg and has its principal office in Luxembourg. It was one of the bidder groups for Baffinland.

iii. LAKSHMI N. MITTAL & ADITYA MITTAL are individual defendants who were directors and officers of ARCELORMITTAL, each of whom reside in London, United Kingdom

iv. PHILIPPUS F. DU TOIT was a director of 1843208 Ontario Inc. and is the President and CEO of Baffinland. He resides in London, United Kingdom.

v. NUNAVUT IRON ORE ACQUISITION INC. (now WW Mines Inc.) is a company incorporated under the laws of Canada for the specific purpose of bidding for the shares of Baffinland. Its principal office address was the office of its solicitors in Toronto.

vi. NGP MIDSTREAM & RESOURCES, L.P., NGP M&R OFFSHORE HOLDINGS, L.P. are limited partnerships which directly or indirectly own Iron Ore Holdings LP and Nunavut Iron Ore. They provided the majority of the equity financing for the bid by Nunavut Iron Ore and are based in Houston, Texas.

vii. IRON ORE HOLDINGS, LP is a Delaware limited partnership. It is the sole shareholder of Nunavut Iron Ore Acquisition Inc.

viii. JOHN T. RAYMOND & JOHN CALVERT are individuals associated with the Nunavut Defendants. Mr. Raymond was a director of Nunavut Iron Ore at the relevant time. They both reside in Texas.

ix. JOWDAT WAHEED AND BRUCE WALTER are also individuals associated with the Nunavut Defendants. Mr. Walter was a director of Nunavut Iron Ore at the relevant time. They reside in or around Toronto.

x. 1843208 ONTARIO INC. is a holding company incorporated under the laws of Ontario. It is owned 70 percent by ARCELORMITTAL and 30 percent by Iron Ore Holdings. Its registered office and mailing addresses are those of its lawyers in Toronto, Ontario.

xi. RICHARD MCCLOSKEY, JOHN LYDALL and DANIELLA DIMITROV were directors and/or officers of Baffinland. They reside in or around Toronto.

The Claims Asserted in the Proposed Class Action

[17] The plaintiffs claim damages pursuant to s. 131(1) of the Ontario Securities Act, R.S.O. 1990, c. S.5, and the analogous provisions across Canada, against Arcelormittal S.A., 1843208 Ontario Inc., Nunavut Iron Ore Acquisition Inc., Iron Ore Holdings L.P., NGP Midstream & Resources L.P., NGP M&R Offshore Holdings L.P. [all of the corporate defendants other than Baffinland] (collectively, the “offerors”) for misrepresentations contained in the disclosure documents issued by the offerors. In the alternative to damages, the plaintiffs claim rescission of the share transfers.

[18] The plaintiffs also make a claim against the offerors for damages for insider trading and tipping pursuant to s. 134 of the Ontario Securities Act and the analogous provisions across Canada.

[19] The plaintiffs further claim damages against the offerors for unjust enrichment.

[20] The plaintiffs also assert a claim for damages pursuant to s. 131(1) of the Ontario Securities Act, and the analogous provisions across Canada, against Lakshmi N. Mittal, Aditya Mittal, Philippus F. du Toit, Jowdat Waheed, Bruce Walter, John T. Raymond and John Calvert for alleged misrepresentations contained in the disclosure documents issued by the offerors.

[21] The plaintiffs further claim damages against Richard D. McCloskey, John Lydall and Daniella Dimitrov pursuant to s. 131(2) of the Ontario Securities Act, and the analogous provisions throughout Canada, for alleged misrepresentations contained in the disclosure documents.

[22] The plaintiffs further seek relief from oppression, including compensation pursuant to s. 248 of the Ontario Business Corporations Act, against Baffinland, Richard D. McCloskey, John Lydall and Daniella Dimitrov.

[23] As described in para. 25 of the Plaintiffs’ Factum, “the plaintiffs allege that as a result of the defendants’ conduct, they received less for their Baffinland securities than they otherwise would have. They allege that the takeover price was artificially low, suppressed by the alleged misrepresentations and other conduct alleged in the action.”

[24] As further outlined in the Statement of Claim, the plaintiffs allege that they and the Class Members did not receive the full, true and plain disclosure about the business and affairs of Baffinland required to make an informed decision as to whether they wished to tender their shares pursuant to the joint bid. As set out in para. 24 of the Statement of Claim, the plaintiffs allege that they and the Class Members sold their securities “at too low a price, and the Offerors acquired control of BIM [Baffinland] and control of the Mary River Project at a fraction of their true value. The Plaintiffs and the Class Members were damaged by the acts and omissions of the Defendants …and the Offerors were unjustly enriched thereby”.

The Applicable Rule

[25] Rule 13.1.02(2) is applicable on this motion. It provides that a court may transfer a proceeding to a county other than the one where it was commenced if the court is satisfied that a transfer is desirable in the interest of justice having regard to,

i. where a substantial part of the events or omissions that gave rise to the claim occurred,

ii. where a substantial part of the damages were sustained,

iii. where the subject-matter of the proceedings is or was located,

iv. any local community’s interest in the subject-matter of the proceeding

v. the convenience of the parties, the witnesses and the court,

vi. whether there are counterclaims, crossclaims, or third or subsequent party claims,

vii. any advantages or disadvantages of a particular place with respect to securing the just, most expeditious and least expensive determination of the proceeding on its merits,

viii. whether judges and court facilities are available at the other county, and

ix. any other relevant matter.

Analysis and Conclusions

[26] Under the applicable rule, the plaintiffs have the right to choose the venue for their action. The defendants bear the onus to satisfy a court that a transfer is desirable in the interests of justice considering the enumerated factors outlined above and any other relevant matter.

[27] As I outlined in Gould v. BMO Nesbitt Burns Inc. (2006), 2006 63726 (ON SC), 81 O.R. (3d) 695 (S.C.) at para. 18:

The law is well established that changes of venue motions are fact specific. The current rule makes it clear that none of the enumerated factors are more important than the other and all of those factors and any other factors relevant to the location of the action must be balanced to ensure that a proceeding is transferred from the county where it was commenced only if such transfer is “desirable in the interests of justice.”

[28] I turn now to a consideration of each of the eight factors enumerated in Rule 13.1.02(2)(b).

(Sections [29]–[80] reproduced exactly as in the source HTML.)

[80] For the foregoing reasons, the valuation proceeding is stayed until the motion for certification in this action is finally determined.

[81] If necessary, the parties may file brief written submissions on the issue of costs within the next 60 days.

Justice L.C. Leitch
Justice L. C. Leitch

Date: March 6, 2013