Securities Law - SCJ

The plaintiff, Ian McPherson, was hired as CEO and Ultimate Designated Person (UDP) of Global Growth Assets Inc. and Global RESP Corporation in August 2018.

His primary task was to bring the companies into compliance with Ontario Securities Commission orders following years of regulatory violations.

In January 2019, the board removed Ms. Hanane Bouji (chair and executive) from Mr. McPherson's supervision, reporting directly to the board instead.

Mr. McPherson repeatedly raised concerns that this decision interfered with his UDP obligations under Ontario securities law and violated the Commission's prior orders restricting Mr. Bouji's (the shareholder and Ms. Bouji's father) involvement in the company.

On February 28, 2019, the board terminated Mr. McPherson's employment without cause.

The court found that Global breached Part XXI.2 of the Ontario Securities Act by terminating Mr. McPherson's employment as a reprisal for his protected activity in expressing concerns about violations of Ontario securities law.

The court awarded Mr. McPherson $5,379,808.22 (two times his remuneration from termination to judgment date) plus prejudgment and postjudgment interest.

This motion concerned the approval of a class action settlement regarding trailing commissions paid by TD Asset Management Inc. to discount brokers.

The plaintiff alleged improper payments and misrepresentations.

The court approved a $70.25 million settlement for the class, along with the proposed notice plan, distribution protocol, and appointment of an administrator.

The court also approved class counsel fees and disbursements, an interim payment to the litigation funder, release of the funder's security, and an honorarium for the representative plaintiff.

The proposed plaintiff, Frank Losak, sought leave to commence a class proceeding against the Financial Services Regulatory Authority (FSRA) and its CEO, Mark White, alleging misrepresentations related to the sale of Pace Savings & Credit Union securities while Pace was under FSRA's administration.

The court determined that leave was required under the Liquidation Order.

It granted leave for the claim against FSRA, finding a viable cause of action not barred by the Crown Liability and Proceedings Act or the Limitations Act, and that it would not undermine the liquidation.

However, leave was denied for the claim against Mark White due to statutory immunity under the FSRA Act, as no particulars of bad faith were provided.

The statement of claim against FSRA was allowed to be issued nunc pro tunc to February 28, 2024.

The plaintiff, Mr. Im, and the defendants (BMO InvestorLine Inc./Bank of Montreal and CIBC Investor Services Inc./Canadian Imperial Bank of Commerce) each brought motions for summary judgment regarding Mr. Im's allegations of improper trade prohibitions in his investment accounts.

Mr. Im claimed damages for malice, misrepresentation, breach of fiduciary duty, negligence, emotional distress, and forfeited profits.

The court found that the financial institutions did not owe fiduciary duties to Mr. Im, did not breach their contractual obligations, were not negligent, and did not engage in intentional infliction of emotional suffering, injurious falsehood, or conspiracy.

The court granted leave to amend the pleading to substitute CIBC ISI for CIBC for the limitations defence but ultimately dismissed Mr. Im's claims on their merits.

Mr. Im's motion for summary judgment was dismissed, and the defendants' motions for summary judgment were granted, resulting in the dismissal of all of Mr. Im's claims.

This decision addresses a carriage motion in proposed securities class actions stemming from a mine landslide.

Two plaintiff groups, represented by Strosberg Sasso Sutts LLP (SSS) and Berger Montague (Canada) PC (BMC), sought carriage.

The court applied the criteria under section 13.1(4) of the Class Proceedings Act, 1992.

It found both firms equally capable in terms of funding and expertise, and the core statutory claims had similar prospects of success.

However, the action led by SSS (Liang action) was significantly more developed, having invested more resources in evidence gathering and expert retention.

This distinction proved determinative, leading the court to grant carriage to the Liang action and stay the competing Jones action.

This decision concerns the approval of a settlement and a plan of allocation in a securities class action, along with class counsel's fees and disbursements.

The plaintiff sought approval for a US$3 million settlement with the Gatos Defendants and Electrum Group entities, following an earlier settlement with the Tetra Tech Defendants.

The court found the Gatos Settlement to be fair, reasonable, and in the best interests of the class, noting it was reached through arm's length negotiations and recovered a significant portion of estimated damages despite litigation risks.

Class counsel's requested fees (25% contingency) and disbursements were also approved as fair and reasonable, considering the complexity and risks of the multi-stage litigation.

This is a motion for a default judgment in a certified class proceeding.

The plaintiff, Web Objective Inc., on behalf of itself and class members, sought judgment against SociaLabra Inc. and Stewart Davis for breach of contract and negligent misrepresentation related to a debenture offering.

The defendants were noted in default for failing to file a statement of defence and provide discovery.

The court applied a three-step inquiry for default judgments, finding SociaLabra and Stewart Davis jointly and severally liable for negligent misrepresentation and SociaLabra concurrently liable for breach of contract.

The court granted judgment for the full amount of damages claimed plus costs.

The plaintiffs in two proposed class actions sought leave to discontinue their actions under section 29(1) of the Class Proceedings Act, 1992.

The decision to discontinue was based on elevated litigation risks due to newly disclosed facts in the defendants' Statement of Defence and the inability to secure third-party funding.

The parties entered into a discontinuance agreement, which included the defendants paying $225,000 for the plaintiffs' counsel's disbursements, no release of individual claims, and no costs sought by the defendants.

The court granted leave to discontinue, finding no prejudice to the putative class, especially given that no class notice had been disseminated and a Notice Plan was in place to inform those who had registered for updates.

The plaintiffs sought leave under the Securities Act to commence a class action against Barrick Gold Corporation and certain officers/directors for alleged misrepresentations in public disclosures concerning the Pascua-Lama mining project.

The court dismissed most of the alleged misrepresentations due to a lack of precision in pleading and insufficient credible evidence, particularly regarding accounting and contingent liability claims, and October 2011, May 2012, November 2012, and March 2013 capex/scheduling claims.

However, the court found a reasonable possibility of success for certain capex budget and scheduling misrepresentations made in February and March 2012, but required further submissions on the issue of public correction for these.

Claims against two individual defendants were dismissed due to their tenure or lack of evidence.

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 application concerned a dispute over a loan agreement and a supplementary security agreement involving pledged shares.

The applicants sought a declaration that the transfer of pledged shares to the respondents was null and void, or alternatively, relief under the Personal Property Security Act (PPSA) or equitable relief from forfeiture.

The court found that the applicants had defaulted on the loan agreement, and the respondents acted within their contractual rights under the security agreement to transfer the shares upon default, without needing to comply with PPSA notice requirements for disposal.

The court also denied equitable relief from forfeiture due to the applicants' conduct and lack of evidence of ability to pay.

The application was dismissed, and the applicants were ordered to pay substantial indemnity costs.

Marian Carroll, a former TD employee, brought an application seeking an order to compel The Toronto-Dominion Bank and its subsidiaries (TD Waterhouse Private Investment Counsel Inc. and TD Asset Management Inc., as Trustees of the TD Mutual Funds Trust and TD Private Funds Trust) to pass their accounts, alleging misconduct and breaches of trust.

The Respondents moved to strike the application for lack of standing.

The court found that Carroll lacked private interest standing as she was not a beneficiary or unitholder and had no direct financial interest in the trusts.

The court also rejected public interest standing, concluding that the application was not a reasonable and effective means to bring the matter before the court, given other available avenues for beneficiaries and regulatory bodies.

The Respondents' motion to strike was granted, and Carroll's application was dismissed with costs.

The defendant, TD Waterhouse Canada Inc., brought a motion for summary judgment to dismiss the plaintiff's action.

The plaintiff, Zhe Chen, alleged negligence by TD Waterhouse regarding margin account management, foreign exchange losses, trading restrictions, and incorrect tax reporting (T-5008 forms) which led to an erroneous CRA assessment.

The court found that the contractual agreements entitled TD Waterhouse to manage accounts as it did, without notice, and that there was no misrepresentation or breach of good faith.

Regarding the tax issue, while TD Waterhouse may have breached a statutory duty by not filling in cost information on T-5008 forms, it provided a CRA-approved T-5008 Summary with all necessary information.

The court found no basis to establish a duty of care for the foreseeable harm caused by the plaintiff's accountant's bad advice or the plaintiff's failure to file tax returns.

The motion for summary judgment was granted, dismissing the action.

Karen Deer initiated an action against RBC Dominion Securities Inc. and others, alleging unauthorized margin account activity.

She issued a Notice of Action but failed to file a Statement of Claim within the prescribed 30 days, leading to the presumptive expiry of a limitation period under the Securities Act.

Deer moved to extend the time for filing her Statement of Claim and validate its service.

RBC opposed, arguing non-compensable prejudice due to the loss of a limitations defence.

The court granted Deer's motion, finding a reasonable explanation for the delay and no actual prejudice to RBC, emphasizing the policy of adjudicating cases on their merits over strict adherence to procedural rules when no substantive prejudice exists.

Various defendants brought motions to strike the plaintiffs' statement of claim, which alleged civil conspiracy, defamation, intentional interference with economic relations, and unjust enrichment.

The court struck the claims for defamation, intentional interference with economic relations, and unjust enrichment against all applicants.

The civil conspiracy claim against one individual defendant (Moez Kassam) was struck, but the conspiracy claims against the remaining Anson Corporate Defendants, Adam Spears, Sunny Puri, ClaritySpring Inc., Nathan Anderson, Richard Molyneux, and Darryl Levitt were allowed to proceed.

The court also clarified that 'whistleblower' complaints to the Ontario Securities Commission are subject to absolute privilege and do not constitute the commencement of legal proceedings for the tort of abuse of process.

The plaintiff investment dealer, Raymond James Ltd. (RJL), terminated its agency agreement with the defendant investment advisor, Jayanth Noronha, after discovering he was involved in off-book investments and using personal email for business, contravening RJL's compliance manual and IIROC rules.

Upon termination, the outstanding balance of a forgivable loan to Noronha became immediately due.

RJL sued for this balance, while Noronha counterclaimed for wrongful termination and breach of good faith, alleging RJL sought to misappropriate his book of business.

The Investment Industry Regulatory Organization of Canada (IIROC) subsequently found Noronha guilty of multiple rule violations, including off-book trading, undisclosed remuneration, conflict of interest, and deleting email records, leading to a lifetime ban.

RJL moved for summary judgment.

The court found no genuine issue for trial, holding that the loan was contractually due upon termination, and Noronha's termination was justified by his regulatory breaches, not a pretext to seize his client base.

The IIROC findings further confirmed the validity of RJL's actions.

The motion for summary judgment was granted, allowing RJL's claim and dismissing Noronha's counterclaim.

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.

The applicant sought an order compelling the respondent to comply with a Divisional Court order to call a shareholders' meeting with a specific record date (October 24, 2016).

The respondent faced difficulties with its transfer agent, Computershare, in generating an omnibus proxy for the specified record date, citing standard securities communication requirements (National Instrument 54-101) and the need for a new record date.

The court clarified its jurisdiction, emphasizing that the Divisional Court had already set the record date as a fundamental element of its order.

The court found that technical compliance mechanisms like NI 54-101 and s. 95(4) of the Business Corporations Act could be overridden by court orders under s. 106 of the OBCA to achieve justice.

The court ordered a customized approach, authorizing the use of a specific report for shareholder identification and directing intermediaries to transmit meeting materials and voting preferences based on the original record date, regardless of subsequent share transfers.

The Plaintiffs in a class action sought leave to examine second corporate representatives for AIC Limited and CI Mutual Funds Inc., and to examine non-party witnesses, pursuant to Rules 31.03 and 31.10 of the Rules of Civil Procedure.

The court dismissed the motions, finding that the Plaintiffs had not demonstrated that satisfactory answers could not be obtained from the initial representatives or that it would be unfair to proceed to trial without further examinations.

The court emphasized that Ontario's discovery rules generally envision a single examination per party, with the representative obliged to inform themselves and provide information based on knowledge, information, and belief, including through undertakings.

The applicant sought a declaration that its perfected security interest in amounts payable by the City of Toronto to Selectore Ltd. had priority over a garnishment notice served by the respondent Globealive Wireless Management Corp. Globealive argued that the applicant's loan was not in default when the receivable became due, thus precluding the applicant's right to the funds.

The court, relying on section 20(1)(a)(ii) of the Personal Property Security Act, held that a perfected security interest takes priority over a later notice of garnishment, irrespective of whether the secured loan was in default at the time the receivable became due.

The applicant's motion was granted, affirming its priority, and Globealive was ordered to pay costs to both the applicant and the City of Toronto.