COURT FILE NO.: CV-11-431153-00CP DATE: 2019/06/19 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

THE TRUSTEES OF THE LABOURERS' PENSION FUND OF CENTRAL AND EASTERN CANADA, THE TRUSTEES OF THE INTERNATIONAL UNION OF OPERATING ENGINEERS LOCAL 793 PENSION PLAN FOR OPERATING ENGINEERS IN ONTARIO, SJUNDE AP-FONDEN, DAVID GRANT, ROBERT WONG, DAVIS NEW YORK VENTURE FUND, INC. and DAVIS SELECTED ADVISERS, L.P. Plaintiffs - and - SINO FOREST CORPORATION, ERNST & YOUNG LLP, BDO LIMITED (formerly known as BDO MCCABE LO LIMITED), ALLEN T.Y. CHAN, W. JUDSON MARTIN, KAI KIT POON, DAVID J. HORSLEY, WILLIAM E. ARDELL, JAMES P. BOWLAND, JAMES M.E. HYDE, EDMUND MAK, SIMON MURRAY, PETER WANG, GARRY J. WEST, CREDIT SUISSE SECURITIES (CANADA), INC., TD SECURITIES INC., DUNDEE SECURITIES CORPORATION, RBC DOMINION SECURITIES INC., SCOTIA CAPITAL INC., CIBC WORLD MARKETS INC., MERRILL LYNCH CANADA INC., CANACCORD FINANCIAL LTD., MAISON PLACEMENTS CANADA INC., CREDIT SUISSE SECURITIES (USA) LLC and MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (successor by merger to Banc of America Securities LLC) Defendants

Daniel Bach for the Plaintiffs Robert W. Staley, Jonathan G. Bell and Jason M. Berall for Cosimo Borrelli, in his Capacity as trustee of the SFC Litigation Trust John Pirie, David Gadsden, and Michael Nowina for Pöyry Management Consulting (Singapore) Pte Limited and Pöyry (Beijing) Consulting Company Limited

Proceeding under the Class Proceedings Act, 1992

HEARD: May 30, 2019

PERELL, J.

REASONS FOR DECISION

A. Introduction

[1] In this proceeding under the Class Proceedings Act, 1992 [1], the Defendants Pöyry Management Consulting (Singapore) Pte Limited and Pöyry (Beijing) Consulting Company Limited (collectively “Pöyry”) brings a motion for an Order:

a. that the “Releasors” as defined in a court approved settlement agreement are prohibited from: (i) participating, aiding, abetting or acting in concert in any manner whatsoever with the Litigation Trustee to pursue claims in an action in Singapore; and (ii) receiving any money recovered by the Litigation Trustee from Pöyry in the Singapore Action; and

b. declaring that Cosimo Borrelli, in his capacity as Litigation Trustee, has breached the Settlement Approval Order by commencing and pursuing the Singapore Action against Pöyry;

c. authorizing and empowering Pöyry to apply to any court, tribunal, or administrative body, wherever located, for the recognition of the requested Order and for assistance in carrying out the terms of the Order, and

d. authorizing and empowering and that Pöyry to act as a representative in respect of the within proceedings for the purpose of having these proceedings recognized in a jurisdiction outside of Canada.

B. Factual Background

[2] The Defendants are: Sino Forest Corporation (“Sino Forest”), Ernst & Young LLP, BDO Limited (formerly known as BDO McCabe Lo Limited), Allen T.Y. Chan, W. Judson Martin, Kai Kit Poon, David J. Horsley, William E. Ardell, James P. Bowland, James M.E. Hyde, Edmund Mak, Simon Murray, Peter Wang, Garry J. West, Pöyry (Beijing) Consulting Company Limited, Credit Suisse Securities (Canada) Inc., TD Securities Inc., Dundee Securities Corporation, RBC Dominion Securities Inc., Scotia Capital Inc., CIBC World Markets Inc., Merrill Lynch Canada Inc., Canaccord Financial Ltd., Maison Placements Canada Inc., Credit Suisse Securities (USA) LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated (successor by merger to Banc of America Securities LLC).

[3] The Plaintiffs are: Labourers’ Pension Fund of Central and Eastern Canada, the Trustees of the International Union of Operating Engineers Local 793 Pension Plan for Operating Engineers in Ontario, Sjunde AP-Fonden, David Grant, and Robert Wong.

[4] The Class Members are comprised of: (a) the purchasers of Sino Forest’s common shares pursuant to the three prospectus offerings; (b) noteholders; i.e., the purchasers of Sino Forest’s debt securities, pursuant to offering memoranda private placements; and (c) the purchasers of Sino Forest’s common shares in the secondary market.

[5] Sino Forest was a forest plantation operator and production company with the majority of its business operations located in China. It was a Canadian corporation with its registered office in Toronto, and its principal business office in Hong Kong.

[6] Sino Forest’s shares were publicly traded over the Toronto Stock Exchange (the "TSX"). During the period from March 19, 2007 through June 2, 2011, Sino Forest made three prospectus offerings of common shares and it also issued various notes, which were sold in private placements pursuant to offering memoranda.

[7] From 2003-2010, Sino Forest engaged Pöyry Management Consulting (Singapore) Pte Limited ("Pöyry (Singapore)") and Pöyry (Beijing) Consulting Company Limited ("Pöyry (Beijing)"), Pöyry-affiliated companies, to prepare valuations of Sino Forest's forest assets.

[8] On June 2, 2011, a short seller published a report alleging fraud by Sino Forest, (the "Muddy Waters Report"). The report alleged that Sino Forest did not own the forestry assets that it had represented as owning. This misrepresentation was made to investors in the primary or secondary market of its securities.

[9] In 2011, Sino Forest’s noteholders and shareholders commenced a class proceeding, and there was a parallel class proceeding in Quebec. The Plaintiffs alleged that Sino Forest had made misstatements in its public filings and its financial statements, had misrepresented its timber rights, had overstated the value of its assets, and had concealed material information about its business operations from investors. The Class Members claimed: (a) $2.6 billion, being the amount paid directly to Sino Forest to purchase notes and shares in primary distributions and offerings; and (b) $6.5 billion, being the estimated market capital shareholders lost on the secondary market.

[10] Amongst the defendants sued was Pöyry. The class action claims against Pöyry Beijing, in particular, consisted of: (a) statutory causes of action under the Securities Act [2] that are available to an issuer’s security holders for primary and secondary market misrepresentations; and (b) a negligence claim on the basis that Pöyry Beijing owed and breached a duty of care to the Class Members who purchased Sino Forest’s securities to ensure that its evaluation reports reflected the true nature and value of Sino Forest’s assets.

[11] On March 20, 2012, Pöyry reached a settlement in the class action. Under the terms of the Pöyry Settlement Agreement, Pöyry, as "first settlor", agreed to provide an extensive evidentiary proffer, along with other forms of cooperation, including document disclosure, witness interviews, and ongoing discovery, all to assist the Class Members in the prosecution of claims against the non-settling defendants.

[12] Under the Pöyry Settlement Agreement, the settlement class was composed of all persons and entities who purchased Sino Forest’s common shares, notes or other securities from and including March 19, 2007 to and including June 2, 2011: (a) by distribution in Canada or on the TSX or other secondary market in Canada; or (b) who are residents of Canada or who were residents of Canada at the time of acquisition of Sino Forest’s securities outside of Canada.

[13] The Pöyry Settlement Agreement contains a release provision and a bar order provision that are similar to the clauses commonly found in class action settlements.

[14] On March 30, 2012, Sino Forest obtained creditor protection and a stay of proceedings under the Companies' Creditors Arrangement Act (“CCAA”) [3] by the Order of Justice Morawetz. The stay of proceedings was later lifted to allow motions to approve the Pöyry Settlement Agreement.

[15] I was case managing the class action brought in Ontario and by Order on September 25, 2012, I approved the Pöyry Settlement Agreement. [4] The terms of the Pöyry Settlement Agreement were incorporated into the Settlement Approval Order.

[16] The Settlement Order limited the right of the Settlement Class members to recover from the non-settling defendants the portion of damages corresponding to the proportionate liability of the released parties, i.e. the Releasees, as proven at trial. This was set out at paragraph 26 (a) of the Settlement Approval Order as follows:

26 THIS COURT ORDERS AND DECLARES that if the Court determines that there is a right of contribution and indemnity or other claims over, including, without limitation, potential third party claims, at common law, equity or pursuant to the OSA or other statute, whether asserted, unasserted or asserted in a representative capacity or in any other capacity, inclusive of interest, costs, expenses, class administration expenses, penalties, legal fees and taxes, relating to the Released Claims:

(a) the Settlement Class Members shall not be entitled to claim or recover from the Non-Settling Defendants that portion of any damages (including punitive damages, if any), restitutionary award, disgorgement of profits, interest and costs that corresponds to the Proportionate Liability of the Releasees proven at trial or otherwise; and

(b) this Court shall have full authority to determine the Proportionate Liability of the Releasees at the trial or other disposition of this action, whether or not the Releasees appear at the trial or other disposition and the Proportionate Liability of the Releasees shall be determined as if the Releasees are parties to this action and any determination by this Court in respect of the Proportionate Liability of the Releasees shall only apply in this action and shall not be binding on the Releasees in any other proceedings.

[17] The Settlement Approval Order contained bar order language that barred all claims for "contribution, indemnity or other claims over" relating to the "Released Claims" as that term is defined in the Pöyry Settlement Agreement, being generally any and all manner of claims that Settlement Class members had against Pöyry Beijing or its affiliates. The bar order provision of Settlement Approval Order, which were set out in paragraph 25, stated:

25. THIS COURT ORDERS AND DECLARES that, subject to paragraph 30 below, all claims for contribution, indemnity or other claims over, including, without limitation, potential third party claims, at common law, equity or pursuant to the OSA or other statute, whether asserted, unasserted or asserted in a representative capacity or in any other capacity, inclusive of interest, costs, expenses, class administration expenses, penalties, legal fees and taxes, relating to the Released Claims, which were or could have been brought in the within proceedings or otherwise, or could in the future be brought on the basis of the same events, actions and omissions underlying the within proceedings or otherwise, by any Non-Settling Defendant or any Party or any Releasor against all or any of the Releasees are barred, prohibited, and enjoined in accordance with the terms of the Settlement Agreement and this Order ...

[18] On December 10, 2012 pursuant to the CCAA, Sino Forest’s Plan of Compromise and Reorganization, dated December 3, 2012 was approved by order of Justice Morawetz.

[19] Under the CCAA Plan, debt and equity claims against Sino Forest were released. The CCAA Plan expressly released Sino Forest and its subsidiaries from all class action claims.

[20] Under the CCAA Plan, the main group of creditors is defined as "Affected Creditors". This group includes persons with "Noteholder Claims," which are defined as claims in respect of Sino Forest's notes - except claims advanced in the Class Actions. Thus, Noteholder Claims are distinguished from "Noteholder Class Action Claims", involving Sino Forest notes that were part of the class actions.

[21] Under the CCAA Plan, Sino Forest’s remaining assets were vested in new entities controlled by Sino Forest’s Affected Creditors i.e. including persons with Noteholder Claims.

[22] Under the CCAA Plan, the Sino Forest Litigation Trust Agreement was established for the purpose of pursuing Sino Forest's "Litigation Trust Claims," which are defined to include Sino Forest's claims except those advanced in the Class Actions.

[23] The CCAA Plan made clear that the claims transferred to the Litigation Trust were Sino Forest’s independent causes of action against third parties; not claims for contribution or indemnity that Sino Forest might have in the class actions. In particular, the definition of “Litigation Trust Claims” in the Plan includes any cause of action that has been or may be asserted on behalf of Sino Forest, other than a claim released by the Plan or an “Excluded Litigation Trust Claim;” the definition of “Litigation Trust Claims” further provides that the claims advanced in the class action were not transferred to the Litigation Trust and that the claims transferred to the Litigation Trust shall not be advanced in the class actions.

[24] Although Class Action claims were not part of the Litigation Trust’s mandate, the trust was established for the benefit of both the Affected Creditors and also the Noteholder Class Action Claimants. The beneficial interests in the Litigation Trust are referred to as "Litigation Trust Interests," and are divided as follows: (a) 75% to Affected Creditors including persons with Noteholder Claims; and (b) 25% to persons with Noteholder Class Action Claims.

[25] Pursuant to the Litigation Trust, the Litigation Trustee commenced four proceedings against Pöyry entities: (1) on May 31, 2013, an action in Ontario; (2) on March 13, 2014, an action in the High Court of the Republic of Singapore; (3) on March 31, 2015, an arbitration pursuant to the Arbitration Rules of the Singapore International Arbitration Centre; and (4) on March 31, 2015, an action in the Supreme Court of Victoria at Melbourne, Australia.

[26] In these actions, the Litigation Trust advanced the claims that were assigned to it from Sino Forest, including that the claim that Pöyry is liable to Sino Forest for breach of contract obligations and for negligence.

[27] On March 28, 2014, in Ontario, Pöyry moved for, among other things, a declaration that the Litigation Trust’s Ontario Action against Pöyry was commenced in breach of the Bar Order provisions of the Pöyry Settlement Approval Order. On June 20, 2014, Justice Wilton-Siegel dismissed the motion. [5] Leave to appeal to the Divisional Court was denied by Justice Sachs on November 4, 2014. [6]

[28] Before Justice Wilton-Siegel was the issue of whether the Bar Order in the Pöyry Settlement Agreement precluded the Litigation Trust from suing Pöyry. Although Justice Wilton-Siegel was only concerned about the Litigation Trust’s action in Canada, the general issue before him was the effect of the bar order provisions of the Pöyry Settlement Agreement on actions, be they in Ontario or overseas.

[29] Pöyry submits, however, that during the course of the motion before Justice Wilton-Siegel, the Court and Pöyry were unaware that the money at issue in the Ontario Action in the claim within the mandate of the Litigation Trust was the same money the investors had sought to recover from Sino Forest and Pöyry in the Class Actions. In other words, the investors sought to recover what they had invested in Sino-Forest in the class action and the same damages were being claimed in the Ontario action against Pöyry pursuant to the Litigation Trust.

[30] In any event, the effect of Justice Wilton-Siegel’s Order was that the Ontario Action against Pöyry could proceed. However, on June 28, 2016, the Litigation Trust and Pöyry entered a Standstill Agreement. The parties agreed to litigate the Singapore Action before all other actions. All other proceedings commenced by the Litigation Trustee were to be held in abeyance, except the Ontario Action, which was to be dismissed on consent in favour of another arbitration proceeding in Singapore, which was immediately commenced and stayed.

[31] Under the Standstill Agreement, Pöyry and the Litigation Trust agreed that: (a) the Singapore Action would proceed until it has been finally and conclusively disposed of, settled or otherwise discontinued, (b) the other Litigation Trust proceedings against Pöyry would be either dismissed by consent without costs or stayed or tolled pending the outcome of the Singapore Action, and (iii) no other proceedings would be commenced or continued pending determination of the Singapore Action.

[32] It is Section 5.1 of the Standstill Agreement that provides that no other proceedings would be commenced or continued pending the determination of the Singapore Action. Section 5.1 states:

5.1 During the Tolling Period, the Pöyry Parties and the LT shall not commence or continue any action, suit, arbitration or other proceeding of any nature whatsoever, anywhere in the world, other than as expressly set out in this Agreement, against each other or each other’s past and present direct and indirect Affiliates and their respective past, present and future partners, divisions, subsidiaries, predecessors, successors, assigns, agents, representatives, servants, employees, officers and directors, shareholders, trustees, insurers, attorneys, consultants, sub-consultants, heirs, executors, administrators and/or beneficiaries, and the predecessors, successors, purchasers, heirs, executors, administrators and assigns of each of the foregoing persons and entities with respect to any valuation or other services provided at any time by any of the Pöyry Parties or any of their Affiliates to SFC or any of SFC’s Affiliates, whether based on contract, tort, delict, under statute or otherwise under any theory of liability (the “Barred Proceedings”).

[33] Section 5.2 of the Standstill Agreement provides that any party violating section 5.1 shall immediately discontinue the “Barred Proceedings” and be liable for full indemnity costs, and that the Standstill Agreement is a complete defence to any such proceeding: Section 5.2 states:

5.2 It is agreed and understood that if any party breaches the provisions of Clause 5.1 above, the breaching party(ies) shall immediately discontinue the Barred Proceedings and the breaching party(ies) will be liable to the opposing party(ies) for the legal costs incurred in the Barred Proceedings on a full indemnity basis. This Agreement shall operate conclusively as an estoppel in the event of any Barred Proceedings, which might be brought in the future by any of the Pöyry Parties or the LT contrary to Clause 5.1 above and it is hereby agreed and understood that this Agreement may be pleaded by the party(ies) against whom any barred Proceedings are brought, as (i) a complete defence; and (ii) a complete basis upon which to dismiss any barred Proceedings brought contrary to Clause 5.1 above, on a summary basis, and no objection will be raised by the breaching party(ies).

[34] In the Singapore Action, the Litigation Trust alleges that Pöyry (Singapore) is liable for breach of contract and negligence. The Litigation Trust claims that Pöyry (Singapore) failed to exercise reasonable care and skill in conducting the valuation and preparing its valuation report. The pleading alleges that: (a) Sino Forest's directors relied on Pöyry (Singapore)'s allegedly flawed valuation method and report; (b) Pöyry should have withdrawn from the engagement with Sino-Forest; (c) Pöyry knowingly omitted information which caused directors to believe that Sino Forest was in a sound financial position with a strong asset base; and (d) Sino Forest raised funds from the Class Members on the debt and equity markets for years based on the Pöyry reports.

[35] In the Singapore Action, the Litigation Trust seeks total damages of US $593 million. It seeks, among other things: (a) interest paid by Sino Forest on the notes, and other associated costs (US $3.2 million); (b) remuneration and bonuses paid by Sino Forest to its officers and directors (US $33 million); (c) payments by Sino Forest to Pöyry (US $5.0 million); and (d) amounts Allen Chan allegedly diverted from Sino Forest (US $243 million). [7]

[36] In the Singapore Action, Pöyry has pleaded reliance on the Pöyry Settlement Agreement as one of its defences to the Litigation Trust’s claims.

[37] On this motion and in its defence in the Singapore, Pöyry makes very intricate arguments that the release and Bar Order provisions of the Pöyry Settlement Agreement cover the Litigation Trust’s action against Pöyry in Singapore.

[38] The Singapore Action, which was commenced in March 2014, is well advanced and on the eve of trial. Pleadings are closed, demands for particulars have been answered, documents have been produced, and factual and expert affidavits containing evidence in chief have been filed.

C. Discussion and Analysis

1. Introduction

[39] Pöyry is being sued by the Litigation Trust in Singapore. In the motion now before the court, Pöyry submits that by bringing an action against Pöyry in Singapore, the Litigation Trust, which is a creation of the Ontario Court, is breaching the Pöyry Settlement Agreement in two respects: first, Pöyry submits that because of the Pöyry Settlement Agreement, the Litigation Trust must be taken to have released its claims against Pöyry; and, second, Pöyry submits that because of the Bar Order in the Pöyry Settlement Agreement the Litigation Trust is precluded from suing Pöyry.

[40] As noted above, Pöyry raises these two alleged breaches of the Pöyry Settlement Agreement as an aspect of its defence to the Singapore Action. In the motion now before the Ontario Court, Pöyry, in effect, seeks declaratory orders declaring that the Litigation Trust is breaching the Settlement Approval Order by commencing and pursuing the Singapore Action against Pöyry. In effect, Pöyry is asking this court in Ontario to bless or condemn its defences in the Singapore Action and provide an opinion for the Singapore Court.

[41] The Litigation Trust submits that Pöyry’s motion should be dismissed for four reasons. First, the motion is brought in breach of the Standstill Agreement. Second, having regard to Justice Wilton-Siegal’s decision, Pöyry’s motion is barred as res judicata or as an abuse of process. Third, as a matter of comity, this court should not, in any event, determine the substantive issue, but should leave the issue to be determined by the Singapore courts. Fourth, the Litigation Trust submits that the motion should be dismissed on its merits because the Litigation Trust’s claims against Pöyry are not caught by the releases or by the Bar Order of the Pöyry Settlement Agreement.

[42] As may be observed, two of the four reasons advance by the Litigation Trust are in essence forum non conveniens arguments that Singapore is the appropriate forum having regard to the forum conveniens factors including comity and the parties’ own choice of venue (under the Standstill Agreement). As may be observed, three of the four reasons submitted by the Litigation Trust for dismissing Pöyry’s motion are professed reasons for me not to decide the motion on its merits. The fourth reason, however, is based on the Litigation Trust’s submission that the motion should be dismissed on its merits.

[43] I have decided to accept the forum non conveniens arguments and, therefore, I shall not be commenting about the Litigation Trust’s res judicata argument, nor shall I comment about the merits of Pöyry’s arguments about the interpretation and application of the Pöyry Settlement Agreement or of this court’s orders made in the class proceeding or in the CCAA proceeding involving Sino-Forest.

[44] The Litigation Trust’s argument that Pöyry is circumventing the Standstill Agreement and asking the Ontario Court to decide legal issues that have been raised in the Singapore Action and ought to be decided by the Singapore courts is in essence a motion relying on rule 21.03 of the Rules of Civil Procedure, which that states.

(3) A defendant may move before a judge to have an action stayed or dismissed on the ground that,

Jurisdiction

(a) the court has no jurisdiction over the subject matter of the action;

(c) another proceeding is pending in Ontario or another jurisdiction between the same parties in respect of the same subject matter; or

[45] In the immediate case, this court has jurisdiction over the subject matter of the motion now before it, but there is another proceeding not only pending but imminent in Singapore between the same parties in respect of the same subject matter. The case at bar is a paradigm for the court to stay or dismiss the motion pursuant to rule 21.03 (c).

[46] Moreover, this decision is consistent with the Standstill Agreement which is akin to, but not quite, an exclusive jurisdiction clause. Where the parties have by contract specified a particular jurisdiction as having exclusive jurisdiction, this is a very weighty, although not conclusive, factor that favours the specified court as being the natural forum. [8] In Z.I. Pompey Industries v. ECU-Line N.V. [9], the Supreme Court of Canada indicated that a forum selection clause should be enforced unless there is “strong cause” not to enforce it.

[47] I appreciate that the unchallenged evidence of Abraham Vergis, an expert retained by Pöyry is that the Singapore trial judge would be assisted by an interpretation of the Pöyry Settlement Agreement and the Pöyry Settlement Approval Order, but it remains the case that it is not appropriate for this court to decide how another court, the Singapore Court, should interpret, apply, and enforce what is for the Singapore Court a foreign judgment.

D. Conclusion

[48] For the above reasons, I dismiss Pöyry’s motion.

[49] In the first instance I shall leave it to the parties to resolve the matter of costs. If the parties cannot resolve the matter of costs, they may make submissions in writing beginning with the Litigation Trust’s submissions within twenty days of the release of these Reasons for Decision followed by Pöyry’s submissions within a further twenty days.

[50] I appreciate that it is the Litigation Trust’s position that pursuant to the Standstill Agreement it is entitled to costs on a substantial indemnity basis, but I will resolve that matter, if necessary, as part of my costs decision.

Perell, J.

Released: June 19, 2019

COURT FILE NO.: CV-11-431153-00CP DATE: 2019/06/19 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

THE TRUSTEES OF THE LABOURERS' PENSION FUND OF CENTRAL AND EASTERN CANADA, THE TRUSTEES OF THE INTERNATIONAL UNION OF OPERATING ENGINEERS LOCAL 793 PENSION PLAN FOR OPERATING ENGINEERS IN ONTARIO, SJUNDE AP-FONDEN, DAVID GRANT, ROBERT WONG, DAVIS NEW YORK VENTURE FUND, INC. and DAVIS SELECTED ADVISERS, L.P. Plaintiffs - and - SINO FOREST CORPORATION, ERNST & YOUNG LLP, BDO LIMITED (formerly known as BDO MCCABE LO LIMITED), ALLEN T.Y. CHAN, W. JUDSON MARTIN, KAI KIT POON, DAVID J. HORSLEY, WILLIAM E. ARDELL, JAMES P. BOWLAND, JAMES M.E. HYDE, EDMUND MAK, SIMON MURRAY, PETER WANG, GARRY J. WEST, CREDIT SUISSE SECURITIES (CANADA), INC., TD SECURITIES INC., DUNDEE SECURITIES CORPORATION, RBC DOMINION SECURITIES INC., SCOTIA CAPITAL INC., CIBC WORLD MARKETS INC., MERRILL LYNCH CANADA INC., CANACCORD FINANCIAL LTD., MAISON PLACEMENTS CANADA INC., CREDIT SUISSE SECURITIES (USA) LLC and MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (successor by merger to Banc of America Securities LLC) Defendants

REASONS FOR DECISION

PERELL J. Released: June 19, 2019

Footnotes:

[1] S.O. 1992, c. 6. [2] R.S.O. 1990, c. S.5. [3] R.S.C. 1985, c. C-36. [4] The Trustees of the Labourers’ Pension Fund of Central and Eastern Canada v. Sino Forest Corporation, 2012 ONSC 5398. [5] SFC Litigation Trust (Trustee of) v. Pöyry Forestry Industry Consulting Ltd., 2014 ONSC 2452. [6] SFC Litigation Trust (Trustee of) v. Pöyry Forestry Industry Consulting Ltd., 2014 ONSC 5824 (Div. Ct.). [7] The claim with respect to the funds diverted by Allen Chan were added in February 2018. The Litigation Trust alleges that Sino Forest's former CEO and Chairman, Allen Chan, oversaw the "Wood Log Skimming Fraud," which caused "Cash Gap" and "Further Cash Gap" damages by diverting investor money to subsidiary entities controlled by Mr. Chan. [8] Fairfield v. Low (1990), 71 O.R. (2d) 599 (H.C.J.); Ash v. Lloyd’s Corp. (1992), 9 O.R. (3d) 755 (C.A.); Expedition Helicopters Inc. v. Honeywell Inc. (2010), 2010 ONCA 351, 100 O.R. (3d) 241 (C.A.); Momentus.ca Corp. v. Canadian American Assn. of Professional Baseball Ltd., [2009] O.J. No. 5016 (S.C.J.), affd 2010 ONCA 722, affd 2012 SCC 9. [9] 2003 SCC 27, [2003] 1 S.C.R. 450.