Securities Law - SCJ

The plaintiffs brought a motion to approve the settlement of a securities misrepresentation class action against Canada Lithium Corp. and its directors and officers.

The corporate defendant had become insolvent and the only remaining asset was a wasting directors and officers insurance policy.

The parties agreed to settle the action for $400,000, which would be paid entirely to class counsel for fees and disbursements, with no distribution to class members.

The court approved the settlement and the fee request, finding that further litigation would only deplete the insurance policy and that the settlement was fair, reasonable, and in the best interests of the class under the circumstances.

The plaintiffs in a securities class action brought a refusals motion seeking production of draft reports, correspondence, and invoices from the defendants' expert witness.

The expert had retained his own independent legal counsel to assist in researching and drafting his affidavit.

The court dismissed the motion, holding that the expert's consultation with his own independent counsel did not compromise his independence or impartiality.

Applying the principles from Moore v. Getahun, the court found that absent a factual foundation showing improper influence, the draft reports and communications were protected by litigation privilege.

Two competing plaintiffs, Kowalyshyn and O'Brien, brought a carriage motion to determine who would represent the class in a securities misrepresentation class action against Valeant Pharmaceuticals and others.

The proposed class actions alleged that Valeant misrepresented its financial results and business practices, causing billions in losses to investors.

The court analyzed 16 carriage factors, finding most to be neutral or non-determinative.

However, the court found that the interrelationship of class actions in multiple jurisdictions strongly favoured Kowalyshyn.

O'Brien's action was closely tied to a parallel action in Quebec, and the court viewed her Ontario action as a surrogate attempt to stay Kowalyshyn's action indirectly.

The court granted carriage to Kowalyshyn and temporarily stayed O'Brien's action.

The defendants brought a motion for a declaration that the plaintiff's statutory secondary market misrepresentation claim under Part XXIII.1 of the Securities Act was statute-barred.

The plaintiff brought a cross-motion seeking an order granting leave nunc pro tunc to save the claim.

The court found that while the plaintiff was not barred by issue estoppel or abuse of process from arguing for a nunc pro tunc order, the request failed on its merits.

Applying the Supreme Court's decision in CIBC v. Green, the court held that a nunc pro tunc order was not available because the plaintiff had not filed a motion for leave before the expiry of the limitation period, and the equitable factors did not favour granting the order.

The defendants' motion was granted and the plaintiff's cross-motion was dismissed.

The applicant sought leave to commence a class action under s. 138.8 of the Securities Act, alleging the respondent mining company failed to disclose a material change regarding the introduction of cement grout pack supports which allegedly caused a decline in production.

The court reviewed the evidence, including expert reports and fact witness affidavits, and found that the overwhelming weight of the evidence demonstrated that cement grout packs were not introduced during the relevant quarter.

Applying the Supreme Court of Canada's threshold test from Theratechnologies, the court concluded the proposed action had no reasonable prospect of success at trial and dismissed the motion for leave.

The plaintiffs in a certified securities class action sought judicial approval of a $17 million settlement and class counsel's legal fees of approximately $4.1 million.

The court expressed concern over the use of boiler-plate affidavits in settlement approvals and required class counsel to provide supplementary evidence demonstrating that the settlement amount fell within a zone of reasonableness.

After reviewing the additional information regarding litigation risks and damages ranges, the court found the settlement to be in the best interests of the class and approved both the settlement and the requested legal fees.

The defendant BCE Inc. brought a consent motion to discontinue a proposed class action concerning alleged secondary market misrepresentations.

The court found that the plaintiff's statutory and common law claims were statute-barred because no motion for leave had been brought within the applicable limitation periods.

As no purpose would be served by continuing the action and no prejudice would result, the court granted leave to discontinue the action without costs and without notice to the putative class members.

The plaintiff sought to certify a securities class action against BlackBerry and its former executives for alleged misrepresentations in financial statements relating to smartphone revenue recognition.

The defendants did not oppose certification except regarding the inclusion of Nasdaq purchasers in a 'global class'.

The court certified the class action for TSX purchasers, finding the requirements of s. 5(1) of the Class Proceedings Act were met, and adjourned the 'global class' issue to be determined on a future forum non conveniens motion.

The defendants in a securities class action brought a motion to transfer the proceeding from Windsor to Toronto.

The plaintiffs opposed the transfer.

The court considered the factors under Rule 13.1.02 of the Rules of Civil Procedure.

While the plaintiffs' choice of venue was found to be reasonable, the court concluded that the defendants established that Toronto was a significantly better venue, given that a substantial part of the damages were sustained there, the subject matter was located there, and it was more convenient for the parties, witnesses, and counsel.

The motion for a change of venue was granted.

The plaintiffs sued a discount broker, Interactive Brokers Canada Inc., in negligence after a trader they authorized to manage their corporate account lost over $1.8 million.

The plaintiffs alleged the broker breached its 'know your client' and 'gatekeeper' obligations by failing to investigate 'red flags' regarding the trader's status as an unregistered investment advisor.

The court dismissed the action, finding the broker complied with all regulatory requirements for opening a corporate account and was entitled to rely on the corporate resolution granting the trader authority.

The court also noted that even if liability were found, the plaintiffs failed to mitigate their damages after discovering the initial losses.

The plaintiff sought leave under s. 138.8 of the Securities Act and certification under the Class Proceedings Act to bring a class action against a mining company for secondary market misrepresentation.

The plaintiff alleged that the company's public disclosures regarding mineral production and grade levels were false, as purportedly revealed by a subsequent technical report and anonymous short-seller internet postings.

The court dismissed the motion, finding that the plaintiff failed to show a reasonable possibility of success at trial because the defendants' uncontroverted expert evidence explained that the discrepancies between the reports were due to different reporting parameters, not misrepresentations.

The applicants, Central GoldTrust and Silver Bullion Trust, sought declarations and injunctive relief to stop hostile takeover bids by the respondents.

The applicants argued the bids violated advance notice by-laws, proxy solicitation rules, and withdrawal rights under the Securities Act.

The respondents cross-applied to invalidate defensive amendments made by the applicants' boards to their declarations of trust.

The court dismissed the applicants' requests to enjoin the bids, finding no violation of proxy rules or advance notice by-laws, but ordered a minor amendment to the powers of attorney regarding withdrawal rights.

The court granted the respondents' cross-application, invalidating the defensive amendments as they were enacted primarily to thwart the takeover bids.

The plaintiff, a former shareholder of the corporate defendant, brought motions for leave to commence a secondary market liability action under the Securities Act and for certification as a class proceeding.

The defendants filed affidavits opposing the motions.

The plaintiff served requests to inspect hundreds of confidential documents mentioned in the affidavits under Rule 30.04(2) prior to cross-examinations.

The court dismissed the motion, finding that the requests lacked specificity, relevance, and proportionality, and that allowing such a fishing expedition would undermine the statutory gatekeeping purpose of the Securities Act leave provisions.

The plaintiffs brought a motion for approval of a settlement in a certified securities class action, approval of class counsel's fees, and payment of honoraria to the representative plaintiffs.

The action alleged misrepresentations and failure to disclose material changes regarding a major contract.

The court reviewed the proposed settlement of USD$3.5 million, the requested class counsel fees of 30% of the recovery, and the honoraria.

Applying the relevant legal tests, the court found the settlement to be fair, reasonable, and in the best interests of the class, and approved the settlement, fees, and honoraria.

The plaintiffs brought a motion for certification of a class proceeding and for leave to proceed with statutory claims for misrepresentation under the Securities Act against Celestica Inc. and its former executives.

The plaintiffs alleged misrepresentations regarding a 2005 restructuring, inventory, revenue, and GAAP compliance.

The court granted leave and certified the class action solely with respect to the alleged misrepresentations about the 2005 restructuring, finding a reasonable possibility of success.

Leave and certification were denied for the inventory, revenue, and GAAP claims due to a lack of evidentiary foundation.

The court also declined to certify the common law negligent misrepresentation claim, finding it did not satisfy the preferable procedure criterion.

The defendants brought a motion to amend the class definition in an Ontario securities class action to exclude persons who would be bound by a pending settlement in parallel U.S. class proceedings.

The U.S. settlement was conditional on the Ontario court granting this amendment.

The court applied the Currie factors and recognized the U.S. court's judgment approving the settlement, finding that the U.S. court had a real and substantial connection to the claims, and that the absent class members were accorded procedural fairness and adequate representation.

The court further determined that amending the class was the preferable procedure, as it would facilitate access to justice for the overlapping class members without unfairly prejudicing the remaining class members.

The motion was granted and the class definition was amended.

The plaintiff invested in a limited partnership that purchased shares of a private corporation.

The investment failed, and the plaintiff sued the promoters, a minority shareholder who sold his shares, and the valuators who appraised the shares.

The minority shareholder and the valuators brought motions for summary judgment.

The court granted the motions, finding no evidence that the minority shareholder participated in any conspiracy or breached securities laws.

The court also found that the valuators owed no duty of care to the plaintiff, the plaintiff did not rely on the valuation, and any claim for negligent valuation belonged to the limited partnership under the rule in Foss v. Harbottle.

The plaintiffs in an Ontario securities class action moved for approval of the notice of certification.

The lead plaintiff in parallel U.S. proceedings, who was also a member of the Ontario global class, moved to participate in the motion, arguing that the notice should be delayed and should include detailed information about the U.S. proceedings.

The court granted the U.S. plaintiff standing to participate but held that the notice of certification should be issued promptly to protect class members' litigation autonomy.

The court determined that the notice should inform class members of the existence of the U.S. proceedings but should not include detailed or comparative information, as that would be confusing and unnecessary at this stage.

The plaintiffs brought a motion to certify a class action against financial advisors and their dealer, alleging they systemically recommended a 'Leveraging Scheme' to borrow money to invest in mutual funds without regard to suitability.

The court granted certification, finding that the pleadings disclosed a cause of action, the class was identifiable, and common issues existed regarding the duty of care, breach of duty, and punitive damages.

The court declined to certify damages as a common issue, finding it required individual assessment.

The court also held that a class proceeding was preferable to the Ombudsman for Banking and Investment Services (OBSI) process, which lacked binding remedial powers and adequate investor participation.

A motion to introduce fresh evidence of an MFDA settlement was dismissed.

Three competing groups of plaintiffs and their respective counsel brought carriage motions seeking to represent a class of investors who suffered losses following a massive decline in the value of Sino-Forest Corporation's securities.

The court evaluated the competing actions based on factors including the definition of class membership, class period, theory of the case, causes of action, joinder of defendants, and prospects of certification.

The court stayed the Smith and Northwest actions and granted carriage to the Labourers action, finding its approach to the class definition, causes of action, and joinder of defendants to be the most cohesive and in the best interests of the class.