Securities Law - SCJ

This decision resolves a carriage motion between three proposed class actions seeking damages for investors in The Toronto-Dominion Bank, arising from alleged misrepresentations and failures to disclose anti-money laundering (AML) deficiencies.

The court concludes that the Parkin action is best suited to advance the class members’ claims efficiently and cost-effectively, considering the statutory criteria under the Class Proceedings Act, 1992.

The decision addresses the impact of late registration of a class proceeding, the legal framework for carriage motions, the comparative strengths and weaknesses of each action, and issues of funding and counsel experience.

In a securities class action, the plaintiff sought multiple orders in advance of a settlement approval motion.

The plaintiff requested leave to proceed against Tetra Tech, Inc. under the Securities Act, leave to discontinue common law negligence and negligent misrepresentation claims against Tetra Tech, and certification of the action as a class proceeding against Tetra Tech for settlement purposes.

Additionally, the plaintiff sought approval to discontinue the action against the Underwriter Defendants based on a Standstill and Tolling Agreement.

The court granted all requested orders, finding that the criteria for leave and certification were met and that the discontinuance against the Underwriter Defendants would not prejudice the class.

This decision concerns a proposed class action for secondary market liability under the Ontario Securities Act.

The parties sought and obtained consent certification of the action, approval of the notice plan, amendment of the plaintiff's pleading to narrow the claim to statutory issues, and substitution of a new representative plaintiff.

The court found that the criteria for certification under the Class Proceedings Act, 1992, were met, including commonality of issues and the appropriateness of the new representative plaintiff.

The Plaintiff, Jennifer Black, brought a motion for an interlocutory injunction to compel the Defendants, Mandeville Private Client Inc. and Mandeville Holding Inc., to allow her to continue providing investment management services to the Majestic Access Funds and to prevent interference with her economic relationship with Majestic Asset Management LLC.

The Defendants brought a cross-motion for an injunction to prohibit Black from soliciting Mandeville clients, citing a non-solicitation agreement.

The court dismissed Black's motion, finding she had no contractual right to transfer the funds or become their sub-advisor, and that Majestic was not a party to the litigation.

The court granted Mandeville's cross-motion, determining that Black's communications with clients prior to her resignation constituted solicitation in breach of the enforceable non-solicitation agreement, which was part of a business sale.

The plaintiff moved to certify a proposed class action against TD Asset Management Inc. (TDAM) alleging that TDAM improperly paid "trailing commissions" to discount brokers for "service and advice" that was not provided, thereby wasting Mutual Fund assets and causing investor losses.

The court granted certification for claims of breach of trust, breach of fiduciary duty, disallowance of improper expenses under s. 23.1 of the Trustee Act, and prospectus misrepresentation.

However, claims for knowing assistance, knowing receipt, and unjust enrichment were struck as analytically unworkable or lacking a proper basis in fact.

The court affirmed the plaintiff's standing as a unitholder to sue the trustee and manager, and found the class definition and common issues suitable for certification, reiterating that certification is a low hurdle not concerned with the merits.

The plaintiffs sued the defendants for breach of a royalty agreement and promissory note following the winding-up of an investment fund.

The court found the defendants breached the royalty agreement by discontinuing payments after the fund's termination, as the agreement provided for a "proportionate continuation" of royalties if a significant amount of unitholders reinvested in successor funds.

However, the court rejected claims of bad faith and the necessity of an Independent Review Committee (IRC) referral for the winding-up decision.

Damages were awarded based on a modified calculation of the proportionate continuation of royalties, significantly less than sought by the plaintiffs.

This case involved two motions within a bankruptcy proceeding.

The bankrupt, Dennis Wing, sought to lift a freeze direction imposed by the Ontario Securities Commission (OSC) on his registered retirement saving plan (RRSP) and locked-in retirement accounts (LIR), arguing they were exempt assets under the Bankruptcy and Insolvency Act (BIA).

The OSC, in turn, sought a declaration that a monetary penalty and costs ordered against Wing for violating a cease trade order (CTO) were not claims provable in bankruptcy, allowing them to enforce the claims post-discharge.

The court dismissed Wing's motion, finding the freeze direction served a purpose given potential opposition to his discharge.

The court granted the OSC's motion, applying the three-part test from AbitibiBowater and Orphan Well Association, concluding that the OSC was not a creditor, the obligation was not incurred before bankruptcy, and the claim's monetary value was too speculative at the date of bankruptcy.

The court also found that a subsequent settlement agreement superseded an earlier undertaking by the OSC regarding enforcement.

The parties disagreed on whether the judge should sign an order dismissing the plaintiff's prior certification and leave motions, or wait for the plaintiff's "motion for reconsideration." The plaintiff argued that signing the order might render the court functus officio, potentially precluding the reconsideration motion.

The defendant argued that the pronouncement of judgment was final and the order should be issued without delay.

The court decided to sign the order, issuing a fiat for its issuance and entry, clarifying that this decision did not determine the functus officio or abuse of process issues, which would be addressed in the context of the plaintiff's omnibus reconsideration motion.

Nobilis Health Corp. sought costs after successfully defending a class action certification motion and leave application brought by Vince Cappelli.

Nobilis requested $200,000 in partial indemnity fees and $311,696.39 in disbursements, primarily for three expert reports.

Cappelli did not oppose the fees but challenged the disbursements as excessive and duplicative.

The court found the expert evidence necessary and critical, despite some overlap, and deemed the disbursements fair and reasonable given the litigation risk.

Costs were awarded to Nobilis as requested, with the Class Proceedings Fund ultimately responsible for payment.

The defendants moved to temporarily stay two related securities misrepresentation actions: an individual action (Vaeth Action) and a proposed class action (Johnson Class Action).

The court granted the temporary stay, finding irreconcilable conflicts of interest for the shared counsel (Morganti Legal) representing both the individual plaintiffs (who intended to opt-out of the class action) and the representative plaintiff of the class action.

The court also found independent reasons to stay the individual action to avoid multiplicity of proceedings and ensure judicial economy, pending the certification and leave motions in the class action.

The plaintiffs, having successfully appealed the dismissal of their class action as time-barred and obtained certification and leave to proceed, sought costs on a partial indemnity basis for the certification and leave motions.

The defendants argued for a significant reduction, citing an "indulgence" (nunc pro tunc order), costs for required steps, limitation period issues, expert reports, divided success, and comparable cases.

The court rejected the defendants' arguments, emphasizing the extraordinary nature of the case, the public interest in access to justice for complex class actions, and the substantial success achieved by the plaintiffs.

The court awarded the plaintiffs the full amount of costs claimed, $2,679,277.82, payable by the Canadian Imperial Bank of Commerce.

The plaintiff, LBP Holdings Ltd., brought a motion in a proposed securities class action to add the defendant's underwriters (Cormark Securities Inc. and Dundee Securities Limited) as party defendants following the original defendant's bankruptcy.

The plaintiff sought to assert five claims: primary market statutory, secondary market statutory, common law negligence, common law negligent misrepresentation, and unjust enrichment.

The court granted leave to add the underwriters for the common law negligence and negligent misrepresentation claims, finding them tenable.

However, the primary market statutory claim was time-barred, and the secondary market statutory claim was untenable as underwriters were not considered "experts" under Part XXIII.1 of the Securities Act.

The unjust enrichment claim was also dismissed as legally untenable due to a valid contractual basis for fees and the principle against shareholder derivative actions for corporate wrongs.

The plaintiffs sought leave to amend their statement of claim to incorporate findings from a Mutual Fund Dealers Association (MFDA) disciplinary panel concerning a salesperson, David Karas, whose conduct was central to the plaintiffs' indemnity claim against the defendant.

The defendant opposed the amendments, arguing irrelevance, improper pleading of similar fact evidence, and inadmissibility of the panel's findings.

The Master found the proposed amendments relevant and determined they did not improperly plead similar fact evidence.

The Master allowed most of the amendments, permitting the pleading of the MFDA panel's conclusions regarding specific rule breaches and the imposed penalty, but disallowed the pleading of the panel's "reasons" or characterizations of Karas's conduct.

The decision clarified that the admissibility and weight of such regulatory findings in the civil action would be determined by the trial judge.

In a securities class proceeding, the plaintiffs sought costs following successful motions in which they opposed summary judgment and obtained nunc pro tunc relief permitting pursuit of a statutory claim despite the expiry of a limitation period under the Securities Act.

The defendants argued that no costs should be awarded due to alleged delay by the plaintiffs, the alleged unnecessary nature of the cross‑motion, and the claim that the plaintiffs succeeded on grounds not advanced by their counsel.

The court rejected these arguments, finding no delay attributable to the plaintiffs and confirming that the cross‑motion seeking nunc pro tunc relief was appropriate.

The court held that the plaintiffs succeeded on their arguments regarding the court’s nunc pro tunc authority and the interpretation of the Court of Appeal’s Timminco decision.

Applying the general rule that costs follow the event, the court awarded the plaintiffs their claimed partial indemnity costs.

In a proposed securities class action, the plaintiffs sought leave under s. 138.8 of the Ontario Securities Act to commence a statutory secondary market misrepresentation claim against certain corporate directors.

The defendants had been noted in default and did not oppose the motion.

The court held that the statutory leave test requires a showing that the action is brought in good faith and that there is a reasonable possibility it will succeed at trial.

Given the deemed admissions arising from the defendants’ default and the evidentiary record concerning alleged misrepresentations in financial disclosure documents, the court found the threshold satisfied.

Leave to proceed against the directors under Part XXIII.1 of the Act was granted.

In a certified securities class action arising from a take‑over bid, the defendant law firm moved for summary judgment dismissing negligence and statutory misrepresentation claims.

The plaintiff alleged that a partner of the firm, who acted as counsel to the bidder and sat on its board, participated in preparing a take‑over circular containing misrepresentations contrary to s. 131 of the Securities Act.

The court held that there were genuine issues requiring a trial regarding whether the law firm owed a duty of care to shareholders who received and relied on the circular.

The court further held that the question of whether a law partnership could be vicariously liable under the Partnerships Act for a partner’s statutory liability as a corporate director should also proceed to trial.

Summary judgment was refused because the issues were novel and required a full factual record.

A shareholder applied under the Canada Business Corporations Act for orders directing the calling of a shareholder meeting, compelling corporate compliance with statutory disclosure and governance obligations, and restraining the remaining directors from transacting business.

The respondent corporation’s board had lost quorum, lacked resident Canadian directors, failed to hold required shareholder meetings, and had defaulted on continuous disclosure obligations under securities legislation.

The court found that extraordinary circumstances justified judicial intervention under s. 144 of the CBCA to call and supervise a shareholder meeting.

Compliance orders were also granted under s. 247 of the CBCA, and restrictions imposed on the remaining directors’ powers due to the absence of board quorum.

To preserve the company’s affairs pending the shareholder meeting, the court directed that a temporary receiver and manager be appointed.

The moving party sought production of documents and information held by a court‑appointed receiver in connection with an investigation related to alleged securities fraud proceedings before the Ontario Securities Commission.

The court considered whether the principles governing third‑party production established in R. v. O'Connor and R. v. McNeil applied to records held by a receiver acting as an officer of the court.

It held that although receivers generally are not required to disclose investigative materials beyond their reports, that protection cannot override an accused’s constitutional right to make full answer and defence.

Applying the O'Connor framework, the court required the moving party to demonstrate that the requested records were “likely relevant.” Only limited categories of documents met that threshold, including certain materials from lawyers, the accountant, and recovered emails, while most requests were rejected as speculative fishing expeditions.

In a proposed securities class action concerning alleged misrepresentations in the prospectus and registration statement for a July 2010 initial public offering, the plaintiff sought court approval to discontinue the action against several underwriter defendants.

Approval was required under s. 29 of the Class Proceedings Act, 1992.

The discontinuance followed a standstill agreement that allowed the claims to be discontinued without costs while tolling limitation periods and preserving the plaintiffs’ ability to revive claims if recovery from vendor defendants became materially less likely.

The court found the discontinuance would not prejudice the proposed class and could reduce litigation costs and potential adverse costs exposure.

Approval was granted and leave was also granted to deliver a Fresh as Amended Statement of Claim.

The moving party brought a consent motion seeking certification of a securities class proceeding and leave to advance a secondary market misrepresentation claim under Part XXIII.1 of the Securities Act.

The claim arose after the issuer disclosed a prolonged fraud in a related loan business that required restatement of financial results.

The proposed class consisted of investors who acquired the issuer’s securities during a specified class period.

The court found that the criteria for certification under the Class Proceedings Act, 1992 were satisfied and that the statutory leave requirement under the Securities Act was met.

The court granted certification, granted leave to advance the statutory claim, and dismissed a parallel action against additional defendants pursuant to the parties’ procedural agreement.